Report on the Implementation of the European Commission External Assistance - Hoofdinhoud

COUNCIL OF Brussels, 9 November 2001 THE EUROPEAN UNION

13744/01

DEVGEN 171 RELEX 150

COVER NOTE

from : Mr Bernhard ZEPTER, Deputy Secretary-General of the European Commission

date of receipt : 7 November 2001

to : Mr Javier SOLANA, Secretary-General/High Representative

Subject : Report on the Implementation of the European Commission External Assistance

Delegations will find attached Commission document SEC(2001) 1743.

________________________

Encl.: SEC(2001) 1743

EN

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 06.11.2001 SEC(2001)1743

COMMISSION STAFF WORKING PAPER

Report on the Implementation of the European Commission External Assistance

COMMISSION STAFF WORKING PAPER

Report on the Implementation of the European Commission External Assistance

Situation at 01/01/01

TABLE OF CONTENTS

COMMISSION STAFF WORKING PAPER Report on the Implementation of the European Commission External Assistance ............................................................................................... 2

Foreword..................................................................................................................................... 8

Introduction ................................................................................................................................ 9

I External aid: a new Policy, a new Management Structure..................................................... 11

• 1. 

  A new strategy for poverty alleviation ....................................................................... 11

• 2. 

  Improving external aid management.......................................................................... 15

II Human Rights, Environment and Other Issues..................................................................... 21

• 1. 

  European Initiative for Democracy and Human Rights ............................................. 22

1.1. 2000: challenges and changes .................................................................................... 23

1.2. The main priority areas............................................................................................... 23

1.3. Other specific aid........................................................................................................ 25

1.4. Actions, region by region ........................................................................................... 26

1.5. Perspectives ................................................................................................................ 26

• 2. 

  Partnership with NGOs .............................................................................................. 29

2.1. Co-financing with the European NGOs ..................................................................... 29

2.2. Decentralised Co-operation........................................................................................ 31

• 3. 

  Women: equal opportunities ...................................................................................... 34

3.1. Activities in 2000 ....................................................................................................... 35

• 4. 

  From Food Aid to Food Security................................................................................ 36

4.1. Food security and existing strategies.......................................................................... 37

4.2. Partnerships ................................................................................................................ 38

4.3. Intervention Instruments............................................................................................. 40

4.4. Perspectives ................................................................................................................ 44

• 5. 

  AIDS and Population.................................................................................................. 45

5.1. Activities in 2000 ....................................................................................................... 46

5.2. Perspectives ................................................................................................................ 47

• 6. 

  Drugs .......................................................................................................................... 48 6.1. Activities in 2000 ....................................................................................................... 50

6.2. Perspectives ................................................................................................................ 50

• 7. 

  Refugees and Rehabilitation....................................................................................... 51

7.1. Aid to displaced populations: a geographic approach................................................ 51

7.2. Rehabilitation actions ................................................................................................. 52

• 8. 

  Environment and forests............................................................................................. 54

8.1. Theme headings, specific headings ............................................................................ 54

8.2. Forests and environment activities in 2000................................................................ 55

8.3. Perspectives ................................................................................................................ 56

III South-Eastern Europe: The Balkans.................................................................................... 57

• 1. 

  Albania ....................................................................................................................... 59

• 2. 

  Bosnia and Herzegovina (BiH) .................................................................................. 60

• 3. 

  Croatia ........................................................................................................................ 62

• 4. 

  The former Yugoslav Republic of Macedonia – FYROM......................................... 62

• 5. 

  The Federal Republic of Yugoslavia – FRY .............................................................. 64

• 6. 

  Horizontal policies ..................................................................................................... 65

• 7. 

  Conclusions and perspectives..................................................................................... 66

IV The Partner States of Eastern Europe and Central Asia...................................................... 68

• 1. 

  Political and Economic Relations............................................................................... 68

• 2. 

  The Tacis assistance programme................................................................................ 69

2.1. Institutional, legal and administrative reform ............................................................ 71

2.2. Private sector and economic development ................................................................. 72

2.3. The social consequences of transition ........................................................................ 74

2.4. Development of infrastructure networks and environment ........................................ 74

2.5. Nuclear safety............................................................................................................. 75

2.6. Regional issues ........................................................................................................... 76

2.7. Cross-border co-operation (CBC) .............................................................................. 78

2.8. Horizontal policies ..................................................................................................... 79

2.9. Conclusions and perspectives..................................................................................... 81

V South Mediterranean,Near and Middle East......................................................................... 82 1. Key figures in 2000 .................................................................................................... 83

• 2. 

  Key objectives ............................................................................................................ 84

• 3. 

  General political and economic context in 2000 ........................................................ 85

• 4. 

  Remaining structural problems .................................................................................. 85

• 5. 

  The MEDA Programme ............................................................................................. 85

• 6. 

  Bilateral co-operation priorities.................................................................................. 87

• 7. 

  Bilateral Co-operation activities in 2000.................................................................... 88

• 8. 

  Regional co-operation priorities................................................................................. 94

• 9. 

  Regional co-operation activities in 2000.................................................................... 95

• 10. 

  Co-operation activities in the Middle East/Gulf region ............................................. 98

• 11. 

  Horizontal policies ..................................................................................................... 99

• 12. 

  Conclusion: a positive assessment in spite of structural difficulties ........................ 101

• 13. 

  Perspectives .............................................................................................................. 102

VI Africa, Caribbean, Pacific ................................................................................................. 104

• 1. 

  The Cotonou Agreement .......................................................................................... 104

1.1. An updated strategy for poverty alleviation ............................................................. 104

1.2. Revised framework for trade.................................................................................... 105

1.3. Focus on good governance ....................................................................................... 107

1.4. Financial allocations linked to results ...................................................................... 107

1.5. Rationalisation of financial instruments................................................................... 108

• 2. 

  Key Policy areas....................................................................................................... 109

2.1. Economic co-operation............................................................................................. 109

2.2. Regional integration and institutional support ......................................................... 111

2.3. Health ....................................................................................................................... 114

2.4. Education and training.............................................................................................. 116

2.5. Rural development ................................................................................................... 118

2.6. Environment ............................................................................................................. 125

2.7. Transport and Infrastructures ................................................................................... 129

2.8. Horizontal policies ................................................................................................... 131

2.9. European Investment Bank (E.I.B.) ......................................................................... 135

2.10. Perspectives .............................................................................................................. 136 VII Asia .................................................................................................................................. 139

• 1. 

  EC co-operation with developing countries in Asia................................................. 140

• 2. 

  Rural development and Environment....................................................................... 142

• 3. 

  Institutional strengthening........................................................................................ 143

• 4. 

  Regional co-operation .............................................................................................. 144

• 5. 

  Focus on the Social Sectors...................................................................................... 145

5.1. Health ....................................................................................................................... 145

5.2. Education.................................................................................................................. 147

• 6. 

  Economic co-operation............................................................................................. 149

• 7. 

  Horizontal policies ................................................................................................... 154

• 8. 

  European Investment Bank (EIB) ............................................................................ 158

• 9. 

  Conclusions .............................................................................................................. 158

VIII Latin America ................................................................................................................. 160

• 1. 

  Regional co-operation .............................................................................................. 161

• 2. 

  Economic co-operation............................................................................................. 164

• 3. 

  Financial and technical co-operation........................................................................ 167

• 4. 

  Horizontal policies ................................................................................................... 171

• 5. 

  Relations with major European and international institutions ................................. 175

• 6. 

  Perspectives .............................................................................................................. 177

Financial tables ....................................................................................................................... 178

ANNEX .................................................................................................................................. 185

• 1. 

  Evaluation activities ................................................................................................. 185

1.1. Evaluation findings of 2000 ..................................................................................... 185

1.2. General evaluation comments .................................................................................. 187

1.3. Country strategy evaluations .................................................................................... 188

1.4. Using evaluation principles ...................................................................................... 188

• 2. 

  Harmonisation of contract award procedures........................................................... 190

• 3. 

  External Aid and ‘RAL’ ........................................................................................... 191

3.1. RAL vs Backlog ....................................................................................................... 191

3.2. How RAL evolved during 2000 ............................................................................... 192 4. Transparency and the Web ....................................................................................... 193

• 5. 

  Current reporting obligations by the European Commission’s services .................. 195 Foreword

  Financial assistance to third countries is one of the central components of the European Union’s external action, alongside trade policy and political dialogue. It is thus an important tool for promoting the fundamental values of the European Union and for meeting the global

challenges of the 21 st century.

The European Union is one of the major actors in international co-operation and development assistance. In total, the European Community and the Member States provides some 55 per cent of total international Official Development Assistance (ODA) and more than two thirds of grant aid. Over the past fifteen years Community external assistance, originally concentrated on ACP countries, has acquired a global reach and the Community is today financing projects in more than 140 countries.

Like other international donors the Community is faced with the challenge of increasing the quality and impact of its financial assistance throughout the world. For the Commission, this challenge is particularly great because the overall volume of its assistance (commitments) has increased rapidly from € 3,3 billion in 1990 to € 9,3 billion in 2000, which means some 10% of the entire world ODA.

This is why, in May 2000 the Commission launched a fundamental reform of its external assistance. This included concentrating the development assistance on a limited number of priority areas with the overriding objective of poverty reduction in developing countries worldwide and better integration of the partner countries into the global economy. At the same time the Commission embarked on an ambitious programme of measures to make significant improvements in the quality and timely delivery of projects while ensuring robust financial management. This reform is an important element of the present wider administrative reform of the Commission.

The full implementation of this ambitious programme will take time and 2000 was a year of initiation and transition. Nevertheless, the preliminary results in terms of concentration on priority areas, streamlining and harmonising approaches and procedures were already apparent in 2000. Also 2000 saw the first sign of quicker implementation of programmes funded by the EC budget by comparison with the previous four years.

This first Annual Report is in itself a reflection of the reform - very much work in progress. Future editions will provide a comprehensive picture of the EC’s external assistance programmes and thus will respond to a range of formal reporting requirements and to the need of inform better the European public.

We have started the most comprehensive reform ever and are looking forward to future reports that will provide clear information on progress with the fundamental improvements in the management of external assistance that we are determined to achieve.

The Board

Introduction

Managing external assistance of more than € 9 billion per annum and involved in more than 140 countries, the European Community is one of the main actors in the area of international co-operation. This document brings together for the first time all the actions taken in the framework of the different external aid programmes of the Commission in 2000, except preaccession instruments, macro-financial aid, Common Foreign and Security Policy and the Rapid Reaction Facility.

A pilot exercise, developed by the EuropeAid Co-operation Office in close collaboration with the Development and External Relations Directorates General, this document brings together elements which were under the responsibility of different services of the Commission. Thus, it

reflects the reform of external aid management decided by the Commission on May 16 th ,

2000 1 .

However, the actions described were prior to the actual start of the reform and to the creation

of the EuropeAid Co-operation Office, on January 1 st , 2001. Therefore, the 2001 annual report,

to be published in 2002, will show the effects of the new direction in development policy and the reform of the European Community’s management of external aid. Nevertheless, the Commission endeavoured to take fully into account the changes already made in accordance with the reform process, in the structure and the content of this document. Thus, it shows the new direction in development policy and the reform of the management of external aid, the actions taken in horizontal matters, and the assistance programmes organised by large geographic zones 2 :

The first chapter places the emphasis on the fight against poverty as the primary objective of development aid, which has focused on six priority areas as decided by the Commission on

April 26 th , 2000 3 :

• The link between trade and development

• Support for integration and regional co-operation

• Support for macro-economic policies which has a direct link with strategies to reduce

poverty

• Transport

• Food security and sustainable rural development

• The strengthening of institutional capabilities, notably in the areas of good governance and

the rule of law.

1 Communication of May 16 th , 2000 on the reform of external aid management

2 The present document does not cover assistance to countries that are candidates for adhesion. These are

covered in reports specific to the three existing assistance instruments: Pare (preparation for adhesion),

Sapard (agriculture and rural development) and Ispa (transport infrastructure and environment).

3 Communication of April 26 th , 2000 on the European Community development policy.

This chapter then presents the key elements of the reform of external aid management, according to four main objectives:

• Improving the quality of the projects

• reducing the time taken to implement them

• harmonising and simplifying technical, financial and contractual management procedures

• improving the impact and the visibility of the European Commission’s external aid.

The second chapter describes the actions taken in the following priority sectors: Human rights, partnerships with non-governmental organisations (NGOs), gender equality, health (aids and demography), drugs, refugees and rehabilitation, food security, environment and forests.

The geographical chapters contain examples of intervention in these areas in order to put emphasis on the integration of thematic actions in the whole of external aid.

Each of the geographical sections is organised according to the same structure:

• General indications (list of countries, global amount of European Community assistance)

• Priorities of Community aid in the region

• Actions developed in 2000, illustrated by examples

• Conclusions and perspectives.

In addition to the information given in the geographical chapters, the recapitulation tables attached in the annexes indicate the amount of Community aid by countries and by themes, according to the nomenclature of the Development Aid Committee of the OECD.

Also included in the annexes are the main measures already applied in 2000 by the Common Service for External Relations (SCR) and which are situated within the framework of the reform; in particular the strengthening of the evaluation process, the winding up of old projects, the simplification of contractual procedures, and the improvement of transparency. The

EuropeAid Co-operation Office replaced the SCR on January 1 st , 2001.

A list of reports of activities, which the Commission must produce according to various regulations regarding assistance programmes, is also reproduced in the annexes.

It is necessary to underline in this regard that from 2002, the complete annual report of the European Community’s external aid will replace all specific reports, within the limits of the Commission’s legal obligations.

Giorgio Bonacci

Director general of the EuropeAid Co-operation Office

I External aid: a new Policy,

a new Management Structure

The European Union is a major player in international co-operation and development aid. It is also the world’s largest humanitarian aid donor. Today, the European Community has political and financial responsibility for over 10% of the world’s public development aid (PDA), compared with 5% in 1985.

In order to improve the quality and the impact of its contribution to development efforts worldwide, the European Commission set, on 26 April 2000, new directions for its development policy, centred on the primary objective of reducing poverty. Parallel with this, the Commission also decided to reform the way it manages third country aid, so as to improve project quality, to cut implementation time, to harmonise and simplify financial, technical and contractual management, and to increase both the impact and visibility of foreign aid.

1. A NEW STRATEGY FOR POVERTY ALLEVIATION

st

It is an uncomfortable but inescapable fact that, at the start of the 21 century, of the world’s 6 billion people, almost half, live on less than US$2 a day, and 1.5 billion – a quarter – live on less than US$1 a day. The problem of poverty is proving so intractable that the number of countries classified by the UN as “least developed” has risen from 24 in 1971 to 49 in 2001.

The European Community and its Member States are strongly committed to reaching the international development targets for poverty reduction set by the United Nations at the second World Summit for Social Development held in Geneva in 2000. These targets, now referred to as the Millennium Development Goals, include reducing the proportion of people living in extreme poverty by half before 2015, with the term ‘extreme poverty’ referring to people living on less than US$1 a day.

During 2000, the Commission proposed new guidelines for the EC’s development policy 4 . These were endorsed by the Council in a Joint Statement with the Commission in November 2000 5 and commit the Commission to:

Mainstreaming poverty reduction

In the Amsterdam Treaty, the campaign against poverty in developing countries is stated as one of the three main objectives of the EC development cooperation policy

6 . This ties in with the other two goals of the sustainable economic and social development of the developing countries, and more particularly the most disadvantaged among them, as well as the smooth and gradual integration of the developing countries into the world economy.As a result, poverty reduction and its overall eradication in all developing countries is the overarching objective of the EC’s new development policy.

4 COM (00) 212 final i of 26 April 2000 “Communication from the Commission to the Council and the

European Parliament. The European Community’s Development Policy”.

5 The European Community’s Development Policy - Statement by the Council and the Commission (10

November 2000).

11

The Cotonou Agreement 7 , which sets out the legal framework for trade and development cooperation between ACP countries and the EU over the next 20 years, also specifically refers to poverty reduction and eradication as the central objective of EU-ACP cooperation (Article 19). Poverty reduction corresponds to one of the five pillars on which the new agreement is based.

The Commission is also active in the construction of Poverty Reduction Strategy Papers (PRSPs). The PRSP concept was launched by the World Bank to provide a framework for mainstreaming poverty reduction in government and donor policies and to ensure donors coordination. The central feature of the PRSPs is that country ownership of the strategy is paramount and governments have the responsibility for both the design process and the final product. PRSPs should be developed through a participatory process involving all stakeholders including the civil society and donors. The PRSPs now provide an important framework for the

th

different aspects of the 9 European Development Fund (EDF) and by the end of 2000, the European Commission had already undertaken the assessments of the interim PRSPs of several developing countries: Benin, Kenya, Chad, Uganda, Sao Tome, Burkina Faso and Ethiopia.

The PRSP concept signifies greater support for agreed public expenditure plans which are focused on poverty reduction. This in turn implies a move towards budget support. As a result, the EC is working with other donors to develop sector approaches which contribute towards poverty reduction. This Sector Wide Approach (SWAp) defines a new way of working between government and donors through a long-term partnership. With a SWAp, all financial assistance from donors supports a single sector policy and expenditure programme led by a government. Donors move a greater part of their support through the recipient country’s public sector systems. SWAp has now become the preferred approach towards supporting pro-poor policy reforms in the social service sectors in developing countries, including the health and education sectors.

Concentrating on priority areas

Experience has shown that if donors are to be effective it is not possible for them to address all the issues connected with poverty reduction. For reasons of efficiency, the Commission has therefore refocused its activities on six priority areas:

• link between trade and development;

• support for regional integration and cooperation;

• support for macro-economic policies and promotion of an equal access to social

services;

• transport;

• food security and sustainable rural development;

• institutional capacity building, particularly in the area of good governance and the

rule of law.

• i) 

  Link between trade and development

12

Trade is a major factor of growth and the creation of wealth in all countries. Being a leading player in both trade and development aid, the Community has a key role in ensuring that a link is established between these two areas to help the integration of developing countries into the world trading system. The Community is committed to facilitating preferential access to markets in the developed countries. However, if the opening up of developed countries’ markets is to have a positive impact, the competitiveness of developing countries’ business sector needs to be strengthened. The international community will also need to support the reforms of developing countries’ trade policies; the concerns of these countries must be taken on board in the World Trade Organisation (WTO). With this in mind, in 1999 (?) the Community financed the opening of an ACP secretariat antenna in Geneva, home of the WTO head office.

• ii) 

  Regional integration and cooperation

Regional integration is a key element in sustainable development. Many developing countries have chosen regional integration as a way of increasing the potential competitiveness of their products. Regional integration also plays a decisive role in consolidating peace and preventing conflicts. Furthermore, this is the only effective way to address trans-boundary issues. The EC intends to use all the instruments at its disposal to support developing countries’ moves towards regional integration.

• iii) 

  Macroeconomic policies and equitable access to social services

Macroeconomic policies are vital to promoting growth and more equal income distribution. However, macroeconomic reforms can only have sustainable effects if they fully embrace the objectives of social and human development. The emphasis on social sectors is consistent with the approach developed in the PRSPs. In line with the macroeconomic framework, the EC is also committed to continuing its support for social sectors (health and education), with emphasis being placed on a sectoral rather than a project-based approach.

• iv) 

  Transport

Reliable transport networks are crucial to economic and social development. Regional integration is also largely dependent on an efficient transport system. For many years, the EC has been a major donor in this sector and the added value of the Community’s contribution to the transport sector has been recognised in many evaluation reports. In addition, the EC has the financial standing to mobilise the large-scale investment required to ensure the construction and maintenance of transport infrastructure in developing countries. In July 2000, the European Commission adopted a Communication setting out policy guidelines for promoting sustainable transport in development cooperation 8 . This policy paper underlined the need to make optimal use of existing facilities as well as the importance of public-private partnership.

• v) 

  Food security and sustainable rural development

Coherent food policies at national and regional level are essential to reduce dependence on food aid and counteract harmful effects on the local environment of food production. The EU has significant experience in food security gained through managing the transition from humanitarian aid towards long-term development assistance.

8 COM (00) 422 i of 6 July 2000 “Communication from the Commission to the Council and the European

Parliament promoting sustainable transport in development cooperation”.

• vi) 

  Institutional capacity building

Well-functioning democratic institutions are vital in the fight against poverty. Good governance, which includes the fight against corruption, and the rule of law, are decisive in poverty reduction strategies. In this context, and as it is perceived to be more neutral, Community action tends to be better suited than Member State action in supporting the strengthening of partner countries’ institutional capacities.

In addition, horizontal principles have been mainstreamed in all areas of the EC’s activities. These include the promotion of human rights, equality between the sexes, children’s rights and the environmental dimension. These are essential factors in ensuring the impact and sustainability of EC cooperation with developing countries.

Expanding activities in the social sectors

In developing countries, infectious diseases such as HIV/AIDS, malaria and tuberculosis continue to be a major barrier to human development and poverty reduction. At the 2000 G8 summit in Okinawa (Japan), the leaders of the world’s seven richest countries plus Russia committed themselves to three critical UN targets to be reached by 2010:

• a 25% reduction in the rate of HIV/AIDS infections among young people;

• a 50% reduction in TB deaths and prevalence of the disease (WTO Stop TB

Initiative) and

• a 50 % reduction in the incidence of malaria (WHO RollBack Malaria).

On 28 September 2000, the European Commission hosted a high level international Round Table to discuss the EU’s policy to confront HIV/AIDS, malaria and tuberculosis within the context of poverty reduction. The Commission’s new policy framework for confronting these diseases was outlined in two Communications, in September 2000 9 (defining a set of policies in the area of development, trade and research to confront these diseases) and in February 2001 10 (further developing the policy framework and indicating how the Commission will meet the challenges of this ambitious agenda).

Education also has a fundamental role to play in a society’s development and its fight against poverty. In the education sector, the EC channels its activities in the following areas:

• access to primary education and basic education as a whole (literacy, formal and

informal training) with priority given to female education;

• job related vocational training to complement work being done by other donors;

and

9 COM (00) 585 final i of 20 September 2000 “Communication from the Commission to the Council and the

European Parliament Accelerated action targeted at major communicable diseases within the context of

poverty reduction”

10 COM 2001(96)final of 21February 2001"Programme for action:accelerated action on HIV/AIDS, malaria

and tuberculosis in the context of poverty reduction".

• higher education, particularly at regional level, in which the EC has a comparative

advantage.

This approach is consistent with the conclusions of the UN “Education for All” Conference held in Dakar in 2000, as well as with the view of the OECD’s Development Assistance Committee (DAC).

The Commission will also seek to avoid information and communication technologies becoming factors which increase the marginalisation of the poor. The Commission believes that the EC and its Member States must rapidly examine the approach they should adopt in relation to this issue. In addition, the Community is committed to promoting research in developing countries.

2. I MPROVING EXTERNAL AID MANAGEMENT

At the same time as defining new directions for the Community’s development policy, an ambitious reform of the way external aid is managed has been launched, aimed at improving project quality and cutting the time taken to implement them..

A first step towards unification of the services tasked with executing the third country aid programmes, and towards improving management was the setting up, in 1998, of the Common Service for External Relations (SCR). The SCR set to work to eliminate payment delays, reduce commitment backlogs, harmonise and simplify contracting and subsidy-granting procedures, and rationalise information systems (see details in the Annex).

On 16 May 2000, the Commission decided to go a further step and set in motion a major reform programme. The concern was, in particular, to:

• considerably improve the quality and adaptability of project management;

• significantly reduce the time taken to implement projects;

• provide harmonised financial, technical and contract management procedures to meet the

best international standards of ethics and responsibility;

• strengthen the impact and visibility of the European Union’s co-operation and development

aid.

This reform programme has four main thrusts:

• a total revision and unification of external aid programming, in line with the objectives and

priorities of European Union policies;

• integrated management of the entire operations cycle;

• setting up a single department (EuropeAid Co-operation Office) tasked with the project

cycle from identification to evaluation;

• large-scale devolution of project management towards the Commission Delegations.

A SSISTANCE TO CANDIDATE COUNTRIES : A SEPARATE ISSUE

"The European Community also provided over € 3 billion of assistance in 2000 to third countries who are candidates to the European Union. Assistance is allocated to priority areas indicated by the Commission in an "Accession Partnerships" for each country, which is based on the weaknesses identified in the Commission's annual Regular Report on the preparations of the candidate country for accession.

Nearly 95% of the assistance was directed to the ten candidate countries of Eastern and Central Europe through three pre-accession assistance programmes. Half of this amount is accounted for by Phare, which is managed by DG Enlargement, and is focussed on helping the countries prepare to implement the acquis communautaire upon accession. One third is for Ispa, which is managed by DG Regional Policy, and is focussed on major investments in the environment and transport sectors. One sixth is for Sapard, which is managed by DG Agriculture, and is focussed on rural development and agriculture.

About 5% of the assistance is allocated to Turkey and is currently implemented using the Meda Regulation. A new financial regulation for Turkey has been proposed by the Commission with a view to replacing financing from the three existing sources in 2002. Finally rather less than 1% of the total is allocated to Cyprus and Malta on the basis of a specific regulation. The assistance to Turkey, Cyprus and Malta is managed by DG Enlargement. It should be noted that these countries remain eligible for support from Meda horizontal projects in the context of the Barcelona process.

For each pre-accession financial instrument the managing DG is responsible within the Commission for the whole project cycle from programming through implementation to evaluation. However it should be noted that these programmes are carried out on a highly decentralised basis with the candidate country itself directly responsible for managing project implementation (subject to some checking of tendering and contracting by Commission Delegations on-the-spot).

A total revision and unification of external aid programming, in line with the objectives and priorities of European Union policies;

From now on, the European Union’s strategic priorities towards a particular country or region are, from now on, formalised in “strategic frameworks”. Since 16 May 2000, the Commission has proposed the use of a single model, applicable immediately to the European Development Funds and to the ALA and MEDA programmes, and progressively to all States in receipt of Community assistance (an approach confirmed in the conclusions of the Development Council of 10 November 2000).

The aid programming implements the global directions and the total appropriations of the strategic framework in a manner consistent with the other objectives (political, commercial, etc.) of this framework.

Programming is multi-annual, indicative and negotiated with the beneficiary country.

The reform also foresees the strengthening of the task of evaluation and its best integration into the project cycle. A follow up system analysing the efficiency, effectiveness, impact, relevance and sustainability of the projects is currently being examined. In addition, the Evaluation Unit has started to study the feasibility of performance indicators in order to measure the global impact of European Community aid.

The management Committee of the EuropeAid Co-operation Office sets the work programme of the Evaluation Unit and makes its decisions based on its reports and recommendations.

A ‘QUALITY SUPPORT GROUP’ FOR PROGRAMMING

An interservice quality support group (IQSG) has been set up, consisting of a small number of members selected for their skills and experience. Its task from now on is to ensure that programming documents meet the minimum quality standards and conform with evaluation results and set objectives. The IQSG works apply to all external aid, with the exception of the pre-accession instruments.

Integrated management of the entire operations cycle: from identification to implementation.

Since 1 January 2001, the Directorates-General “Development” and “External Relations” have been responsible for the political directions and multi-annual programming, which the EuropeAid Cooperation Office is responsible for managing during the remainder of the operations cycle. In order to ensure the proper implementation of the objectives defined at the programming stage, the EuropeAid Co-operation Office is tasked with: identifying and preparing projects and programmes, preparing financing decisions, implementation and monitoring, and project and programme evaluation.

The EuropeAid Co-operation Office, a single service tasked with implementing the Commission’s external aid.

The creation of the EuropeAid Co-operation Office on 1 January 2001, constitutes a central element of the reform of the foreign aid management mechanism.

The EuropeAid Co-operation Office is tasked with implementing the full range of the Commission’s external aid instruments, with the exception of the pre-accession programmes (Phare, Ispa, Sapard), the humanitarian activities, macro- financial aid, the Common Foreign and Security Policy (CFSP) and the Rapid Reaction Facility.

The EuropeAid Co-operation Office has been set up in a way to:

• construct a geographically-based organisation covering five Directorates: Europe, Caucasus,

Central Asia; Southern Mediterranean, Near and Middle East; Africa, Caribbean, Pacific; Asia; Latin America. This new structure should facilitate the integrated management of the entire operations cycle, and ensure stability during the process of management

deconcentration towards the EC Delegations.

• gather together in a single Directorate the management of the thematic programmes (food

aid, co-financing with NGOs, human rights, etc.) in order to ensure a consistency of approaches and a synergy of skills;

• organise the functional activities according to their nature: one Directorate for operational

support and one Directorate for organisational support.

OPERATING STRUCTURE

The EuropeAid Co-operation is a Commission Department. It operates under the supervision of a Board consisting of C. Patten (External Relations Commissioner),

President, P. Nielson (Development and Humanitarian Aid Commissioner),Chief Executive Officer, G. Verheugen (Enlargement Commissioner), P. Lamy (Trade Commissioner) and

P. Solbes Mira (Economic and Monetary Affairs Commissioner).

Political responsibility for the EuropeAid Co-operation Office’s actions towards the College lies with the President and the Chief Executive Officer according to their respective responsibilities. The President supervises the strategic approach of the Board whereas the

Chief Executive Officer ensures that the political guidelines defined by the Board are complied with.

The Board approves, in particular, the annual work programme and the annual report of the Office’s activities, the annual budget programming (including the annual forecasts of the

European Development Funds) and the annual evaluation programme. It is advised of the results of the evaluations and formulates recommendations based on these evaluations.

The Director-General of the EuropeAid Co-operation Office is responsible for all operating budget appropriations falling within the field of activity of the Office and of the European

Development Funds.

EuropeAid Co-operation Office major priorities in 2001:

Implementation of external aid:

– identifying and preparing financing decisions for over € 7 billion;

– ensuring the implementation of ongoing projects and programmes, including their evaluation and closing;

– finalising the inventory of the project portfolio and of ongoing programmes;

– pursuing in a sustained fashion the liquidation of former and dormant commitments;

Implementation of the reform of external aid management :

– setting up the Office;

– successfully completing the devolution of tasks and responsibilities towards the Commission Delegations;

– integrating, at the Office and in the Delegations, the functions of the Technical Assistance Offices that support the Commission in project and programme design and implementation (see box);

– continuing efforts to harmonise and simplify procedures, beyond the harmonisation of contracting and subsidy allotment which was completed at the end of 2000;

– equipping itself with a high-quality information and management system in the form of a single information system (CRIS – Common Relex Information System), replacing the heterogeneous information systems inherited from the Directorates General that formerly managed the projects . From mid-2002 onwards, this system should permit sectional classification of programmes and projects following the Development Aid Committee (DAC) and the OECD nomenclature;

– strengthening the task of evaluation by enhancing it to include the outcomes of regional and sectional policies and programming efficiency;

– strengthening project and programme monitoring capacities (see box);

– intensifying training initiatives in order to ensure a high level of professionalism.

B OOSTING MONITORING CAPACITIES

The EuropeAid cooperation office has taken over and intensified work on creating a uniform project and programme monitoring system in the countries of the Western Balkans, Mediterranean, Latin America, Asia and ACP zones:

– external opinion: using independent specialists;

– global system: monitoring over 3000 projects in 100 countries;

– regular: once a year and then, progressively, twice a year.

End 2000, the test phase has been completed, allowing for the progressive extension of the uniform monitoring system (two to three years from 2001).

TECHNICAL ASSISTANCE OFFICES CLOSING-UP

As per the Commission's decision, EuropeAid Co-operation Office will put the activities of the 48 Technical Assistance Offices (TAO) to an end in 2001. The tasks undertaken by the TAO will be assured by the Commission's services in the Office or at the Delegations.

In order to balance the additional workload the Commission is currently recruiting external staff.

Large-scale devolution of project management towards the Commission Delegations

The reform establishes a principle that now constitutes the Commission’s line of conduct: “everything that can be better managed or decided locally, close to the field, should not be managed or decided in Brussels”.

Analysis of the various foreign aid programmes shows that part of the funds are already being allocated in a devolved fashion. The Commission has, however, started taking the necessary action to broaden and deepen the devolution works in order to have the process completed in 2003, should the Budgetary Authority agree the additional resources.

This involves boosting the statutory and non-statutory staffing of the Delegations, and their progressively taking over responsibility for the identification, preparation and implementation of the projects and programmes. The role of the Head Office will then move towards supervising the deconcentrated activities and providing support (technical, financial and contractual) to the Delegations.

In 2001, the Commission is proceeding with the devolution of the aid management towards 22 Delegations. This exercise should be finalised in 2002 in Europe, the Caucasus region, Central Asia, the Mediterranean, Asia and in Latin America while the process should be continued in the ACP area (some 32 Delegations). The remaining 31 Delegations should be devolved in the course of 2003.

More generally, the process of reforming the management of external aid goes hand in hand with a search for a better relationship between the priorities of the Community’s external assistance policy and the budget resources allocated. During the informal Council of Evian (2-3 September 2000) and the General Affairs Council of 9 October 2000, the Ministers for Foreign Affairs insisted on the strengthening of coherence in the Union’s external action, the translation of objectives into concrete commitments, and the improvement of synergies between Community action and that of its Member States, so that external action may become more visible and effective.

Following the initial debate (held on 23 January 2001), on the direction the European Union is taking regarding its assistance to third countries, the Commission has developed guidelines for strengthening operational co-operation between the Community and its Member States in the field of external aid. As part of this effort, the Commission has prepared data sheets showing, for each beneficiary country, the financial assistance allocated by the Community (aid and bilateral cooperation, macro-financial loans, and loans from the European Investment Bank), bilateral assistance from Member States, and multilateral assistance provided by Member States via the EBRD, the IMF and the World Bank.

For the first time, a single document has been compiled showing the commitments made on behalf of each country since 2000, the new commitments agreed, the payments made in 2000 and the outstanding amounts still due to operations.

T HE 22 D ELEGATIONS INCLUDED IN THE DECONCENTRATION PROCESS IN 2001

Europe: Croatia, Russia et Yugoslavia

Mediterranean: Egypt, Morocco, Tunisia and Turkey

Asia: China, India, Indonesia and Thailand

Latin America: Argentina, Brazil, Bolivia, Mexico and Nicaragua

Africa: South Africa, Ivory Coast , Kenya, Mali and Senegal

Caribbean: Dominican Republic

II Human Rights, Environment and Other Issues

The respect for Human Rights and the rule of law are taken for granted in EU countries. The means are available to solve any possible catastrophe in the shortest possible time. The situation is different in many other parts of the world. This is why the EC now has specific tools on a number of issues. EC actions in the fields of Human Rights, Environment, Aids, Gender, Food Safety, Rehabilitation and the fight against drugs today accompany other “classic” external assistance approaches and underpin the priorities decided on by the European Union in its combat against poverty in the world.

1. E UROPEAN I NITIATIVE FOR D EMOCRACY AND H UMAN R IGHTS

Founded on the principles of freedom, democracy and the respect on Human Rights, the European Union is defending these principles – protecting Human Rights, consolidating democracy and the rule of law, as well as fighting poverty – the promotion and protection of which are

among its fundamental objectives. 11

Beyond the Community’s foreign aid programmes and the resources of the European Development Fund, the European Initiative for Democracy and Human Rights (EIDHR) offers the Union a legal framework and significant resources to provide targeted aid and to act in situ, on its own initiative and without prior agreement.

What is the European Initiative for Democracy and Human Rights? Not to be confused with the Commission’s traditional programmes, the EIDHR serves to bolster the EU’s other actions in the field of human rights and democratisation. Compared with other Community instruments (EDF, Tacis, ALA, MEDA, CARDS, Phare), it:

– is complementary to these programmes that are undertaken with governments in that it can be implemented with various partners, in particular NGOs and international organisations;

– represents a type of “venture capital fund” for human rights, allowing initiatives to be launched at a pilot or experimental level, which can then be picked up, on a larger scale, by governments;

– can be used without host government consent or where mainline Community programmes are not available;

– constitutes an essential complement to the EU’s foreign policy and common security objectives in the fields of human rights, democratisation and conflict prevention 12 . In certain regions it represents the sole legal basis for certain activities (political and civil rights protection, election monitoring, conflict resolution initiatives, etc.)

For its beneficiaries, EIDHR provides an added value that sets it apart from other donors.

Frequently identified with the European Union, it cannot but reflect and promote the EU’s democratic values. Because of this the EIDHR is considered to be emanating from Europe as a whole, and not just reflecting specific interests or traditions.

Enjoying the political support of the EU, the EIDHR subsidies can, in certain cases, help protect vulnerable civil society organisations.

11 See the Communication from the Commission to the Council to the European Parliament of 8

May 2001 on the European Union’s role in promoting human rights and democratisation in third countries (COM(2001)252 final i).

22 The EIDHR can also facilitate the adoption of Human Rights and democratisation initiatives on a regional basis, given the very nature of the EU (an organisation committed to regional integration) and the existence of agreements between the Union and regional groupings.

With the exception of Turkey, the candidate countries are not eligible for the EIDHR.

T HREE EXPRESSIONS OF THE U NION ’ S H UMAN R IGHTS POLICY

The European Community’s foreign aid programmes attack the root causes of poverty.

The European Development Fund (EDF) covers Africa, the Caribbean and the Pacific Region. € 182 million have been spent on direct support to human rights and democratisation between 1997 and 2000 and € 115 million on election assistance and monitoring between 1996 and 1999. (The total EDF budget amounts to € 13.5 billion between 2000 and 2007.)

The European Initiative for Democracy and Human Rights has permitted a considerable improvement in the EU’s commitment. The amounts devoted to human rights have increased from € 200 000 in 1987 to € 100 million at the end of 2000. In addition, since the 1999, the

Union has a significant legal framework for promoting human rights in its external policy 13 .

The EIDHR is allowing the Community, in particular, to support the activities of nongovernmental, international organisations (such as the United Nations High Commission for

Human Rights) and regional organisations (Council of Europe, OSCE, etc.

1.1. 2000: challenges and changes

2000 was a year of transition. It was the first full year in which regulations covering

democratisation and human rights were taken into account 14 , and it was also the first time that the

relevant budget headings were controlled by a single Commission department under the authority of a single Commissioner. This centralisation has brought with it greater coherence and efficiency, with a single methodology and with selection criteria and priorities making it possible to react regionally and globally without being required to submit dossiers to several departments.

Almost 80% of available funds 15 have been allocated to NGOs, who play a particularly important

role in the implementation of the EIDHR. The Commission has also stepped up its co-operation with international organisations, in particular the Office of the United Nations High Commissioner for Human Rights.

1.2. The main priority areas

The EIDHR’s priorities are influenced by various factors, in particular the strategies, actions and joint positions adopted by the EU, as well as those defended in international fora such as the United Nations, the Council of Europe and the Organisation for Security and Co-operation in Europe. Particular attention has also been paid to the resolutions adopted by the European Parliament.

13 Council Regulations 975 and 976/1999 of 29 April 1999 – OJL 120 of 8 May 1999

14 See footnote 12

15 Budget lines B7-700 (Central and Eastern Europe, republics of the former Yugoslavia)/B7-701

(Newly Independent States and Mongolia)/B7-702 and B7-7021 (ACP Countries)/B7-703 Latin America/B7-704 (human rights organisations)/ B7-705 Meda countries/ B7-706 (international criminal tribunals)/ B7-707 Asie/B7-709 (democratic transition and electoral processes) / B7-

702,7021,703,704,705 and 707 (abolition of capital punishment).

Consolidating democratisation and the rule of law, strengthening the organisations of a pluralist civil society, creating confidence and restoring peace, as well as initiatives directed at target groups, are the main areas supported by the EIDHR in 2000.

More specific priorities have been election monitoring projects, human rights instruction, strengthening NGOs, supporting international justice and protecting human rights, women and torture victims.

Almost € 97 million have been allocated to 142 projects to support human rights and

16

democracy . The priorities have been:

Combating torture, the death penalty, racism and xenophobia

The EIDHR devoted € 9.2 million to rehabilitation centres for torture victims and for organisations offering concrete aid to victims of Human Rights violations, and to actions to help prevent torture and mistreatment world-wide. The support given to campaigns and actions to abolish capital punishment, in the longer term, reflect its condemnation by the EU. Over € 3.6 million went to supporting NGO participation in preparatory meetings held in Senegal, Chile and Iran in advance of the 2000 World Conference Against Racism.

Breakdown of the budget by thematic priorities

50000000

40000000

30000000

20000000

10000000

0

Democratisation and the rule of law € 18,251,211

Pluralist civil society € 42,558,602

Confidence-building and the restoration of peace € 3,436,017

Initiatives for target groups € 28,161,893

Technical assistance € 4,888,975 TOTAL: € 97,296,698

Education in human rights and freedom of expression

The EIDHR has devoted € 7 million to human rights education, to public awareness work in Kazakhstan, Belarus, Moldavia, Russia, Jordan, Palestine, Lebanon, Israel, India, Indonesia, Cambodia, Hong Kong and Burma/Myanmar, as well as the African Master’s programme in Human Rights organised by the University of Pretoria.

On top of this, over € 3.8 million have gone to support the media and freedom of expression in various parts of the world, including the Balkans.

Protection of vulnerable groups, in particular children

16 A detailed report on actions supported under the 2000 budget was published in June 2001

http://europa.eu.int/comm/external_relations/human_rights/doc/sec01_801_fr.pdf 12 children’s projects (reintegration of street children, child victims of discrimination, violence and mistreatment) have received funding of over € 8.4 million. The large-scale UNICEF programme to integrate child soldiers in the Sierra Leone armed forces back in their communities was given € 2 million. Other initiatives directed at minorities, native populations, refugees and displaced persons have also been supported.

Promotion and protection of women’s rights

Five women’s emancipation projects have been financed. The Institut Méditerranéen (IMED) received € 1.4 million for actions in Algeria, Morocco and Tunisia in order to increase the potential and operational capacities of women’s associations, trade unions and NGOs working to promote and safeguard women’s rights.

Promotion of democracy and the rule of law

Most of the projects supported in this area were carried out in the ACP region, whilst particular attention has been paid to election monitoring missions, in particular in Sri Lanka, Zimbabwe and Peru.

1.3. Other specific aid

Supporting institutions working in the Human Rights field is one of the Community’s missions. This targeted support spans organisations which are as different as NGOs and international tribunals. With a view to democratisation and justice, the EU is also supporting those working for the abolition of the death penalty.

Human Rights organisations

In 2000 14 NGO-originated projects received € 15.5 million of support. Examples include:

• One mission of the Dutch NGO Netherlands Organisation for Development is to

coordinate the training of workers in its 21 member organisations, 260 of whom are working to promote human rights. A subsidy of € 346 000 has been granted for its

activities in Somalia.

• The British Council project supporting an information network providing data on

Nigerian civil society organisations and human rights has been granted € 791 000 to create publicly available data on human rights (policy, organisations, budgets,

programmes, etc).

International criminal tribunals

The objective is to improve the operations of the International Tribunal for Former Yugoslavia and the International War Crimes Tribunal for Rwanda by means of various evidence-seeking operations (missions, surveys, witness travel, exhumations, etc.). Preparatory work towards setting up an International Criminal Court has also been supported.

• Press coverage of criminal proceedings instigated world-wide for acts of genocide,

crimes against humanity, war crimes and human rights violations, is one project of the NGO Intermedia, which has obtained a grant of € 770 000.

• The Non c’è pace senza giustizia NGO sets out to facilitate the effective introduction

of international instruments of human rights, humanitarian law and international criminal law. It has received support worth € 515 000.

Democratic transition and electoral processes

Supporting elections is an important aspect of the EU’s contribution to democratisation and development in third countries, in the context both of its long-term humanitarian aid and of its political dialogue. Wherever feasible, election monitoring is undertaken jointly with other international players, so as to achieve a coherent international approach and to facilitate third countries’ efforts to organise observers’ independence. The assistance and observation missions that the Commission supports 17 cover a wide range of areas from personnel training to controlling media access during campaigns. It also covers the evaluation of EU’s participation in international monitoring missions during both election and post-electoral periods. € 4.6 million were committed to this project.

Abolition of the death penalty

The EIDHR supports campaigns to mobilise public opinion to obtain a moratorium and, in the longer term, the abolition of the death penalty. A series of projects reflect the EU’s condemnation of the death penalty:

• Placements and lectures for training almost 100 students a year over a 3-year period in

assisting persons condemned to death have been organised in the capital punishment studies department of the University of Westminster (UK). Specialist data bases have also been created for the lawyers of people sentenced to death. This project has

received € 676 000.

• The creation of a research and training centre for DNA testing in the forensic

medicine context. This initiative by the University of the Philippines can, in certain cases, help overturn verdicts, particularly for people awaiting execution in the

country’s prisons. € 305 600 have been made available to support this action.

1.4. Actions, region by region

From one country and continent to the next, initiatives receiving EU support combat shortcomings that are all too similar: lack of democracy, denial of fundamental human rights, the primary victims of which are often women, children and minorities, and the lack of press and other freedoms. In various regions, however, depending on the historical and cultural context and the degree of urgency, special emergency situations arise. And the projects devoted to resolving them receive extensive Union support.

The most significant actions in the various regions are reported in the chapters devoted to these regions.

1.5. Perspectives

In May 2000, the Commission adopted a communication setting out three areas in which it can play a more effective role in pursuing the European Union’s objectives in the field of human rights and democratisation:

17 Communication from the Commission to the Council and the European Parliament of 11 April

2000 – COM(200) 191.

• encouraging consistency between EU and EC policies, whilst according greater

priority to these objectives in the European Union’s relations with third countries,

• ensuring that the full range of the Community’s aid instruments are mobilised to

support the human rights and democratisation objectives,

• adopting a more targeted and strategic approach to the European Initiative for

Democracy and Human Rights.

That means that the Commission’s approach to the EIDHR is being based on a limited number of priority themes and a certain number of countries These will be examined annually, in consultation with Member States, Parliament and organisations of civil society. The management reforms – those of which that relate to EIDHR have already begun – will continue in order to achieve greater transparency and efficiency and a lasting impact.

EIDHR : REGIONAL SHARE IN 2000

In Asia, 10 times more projects have been supported during 2000 than between 1996 and 1999. Allocations to the ACP and Latin American regions have also increased.

Wor ld- w ide

12% ACP

MEDA 24%

11%

Latin A sia America 10%

19% CEEC, SEE

and NIS

24%

2. P ARTNERSHIP WITH NGO S

For many years, the European Commission has been supplementing its development aid programmes by supporting specific projects that respond to local needs, under the auspices of European NGOs or of groupings in developing countries. This approach takes greater account of the needs of civil society and the micro-projects. Two major directions of the EC’s work are responding to these needs: co-financing with European NGOs and decentralised co-operation.

Since 1976, the European Commission has been co-financing, with European nongovernmental organisations (ENGOs), specific operations corresponding to the needs of vulnerable groups 18 . These partnerships, which lend an additional dimension to the Union’s development policy, benefit from the active support of the European Parliament. They are growing in number and their budget topped € 200 million in 2000.

These co-financing operations are different from other Union development aid in two ways:

– funding may be granted only to organisations having their headquarters and their decision-making centres in one of the member states;

– they correspond to requests from ENGOs, which alone have the right to take initiatives here.

Another flexible concept, that of decentralised co-operation, was introduced into the fourth Lomé agreement (1990-2000), which, until the Cotonou agreements were signed, linked the European Community and the countries of Africa, the Caribbean and the Pacific (ACP) 19 . Given the concern to provide development aid which is directed at increasing the autonomy of southern hemisphere countries, this co-operation may be established with a large number of partners: ENGOs, NGOs in developing countries, local public authorities, professional groupings, etc. In particular, this approach makes it possible to respond to emergencies and the requests of different components of civil society, and to support micro-projects.

2.1. Co-financing with the European NGOs

In these specific partnerships, the Union supports three kinds of operation conducted by ENGOs:

• in situ operations;

• awareness-raising campaigns in Member States;

18 The legal basis of this co-operation was fixed in 1998 (Regulation 1658/98 i). In January 2000, new

general conditions supplemented this Regulation, replacing those of 1988.

19 Co-operation between the EC and the ACP countries has been governed since 1975 by the Lomé

Convention. It is regularly brought up to date, and was reorganised in depth by the Cotonou

agreements in 2000

• operations to strengthen co-operation.

In situ operations

These operations are conducted by ENGOs in collaboration with their partners in developing countries. Their main objective is to fight poverty and to improve the quality of life and the capacity for development of local populations. They involve various projects, but special attention is accorded to strengthening the organisations of civil society and to participatory development, favouring human rights and democracy, the role of women, sustainable development, the defence of threatened cultures and the protection of children.

These operations 20 take the form of multiannual programmes or global funding packages. The latter are “bouquets of projects” proposed by a ENGO and which combine a number of different initiatives. The beneficiaries of such funding are the poorest groups of people, who are often marginalised and who are not the subject of official co-operation programmes. Such operations are proposed by the ENGOs in order to reach these groups and are initiated and conducted in collaboration with their partners in developing countries. The Cotonou agreements have introduced the requirement for ACP countries to develop their individual poverty reduction programmes in co-operation with organisations of their civil societies.

Operations co-financed with ENGOs are mainly undertaken in less developed countries or countries undergoing rehabilitation, and also in states where support for civil society organisations is vital in order to strengthen the democratic process and in those with which official co-operation from the Community has been suspended or has never existed because of a conflict (see box).

Operations receiving support in 2000 covered mostly vocational training, primary health care in urban and rural areas, and institutional support for local development structures, including partner organisations in developing countries.

Awareness-raising campaigns in Member States

These operations mobilise public attention in Europe in favour of action strategies intended to have a positive impact on populations in developing countries. They target specific groups (schools, consumers, etc.) and concern clearly defined themes (fair trade, debt, food security, etc.). They are based on a balanced analysis and proper knowledge of the themes and the targeted groups, and must have a European dimension. In order to reach Member States’ citizens, the Commission is co-financing projects proposed and initiated by ENGOs, who act as intermediaries and constitute a bridge between public opinion in the Union and the populations of developing countries.

Particular attention is paid to projects that:

• stress interdependence between the European Union and developing countries in three

main areas: labour, the environment and conflict prevention;

20 Whether or not this kind of operation will be continued in 2002, will depend on the outcome of an

independent assessment conducted at the request of the Commission

• mobilise support in favour of more just North-South relations;

• encourage collaboration between ENGOs;

• permit active participation by the partners in the developing countries.

Programmes to strengthen awareness-creating capacity are also co-financed. This new tool is aimed at small ENGOs working in this field. Each programme consists of “microactions” and joint actions which build on experience already gained.

In 2000, co-financing concerned projects to make development a part of school curricula, projects to promote alternative trade and support for lobbying campaigns such as those concerning debt and food security.

Operations to strengthen cooperation

These operations support the development of exchange networks and appropriate forms of communication in order to strengthen and to co-ordinate synergies between NGOs and States, and between these organisations and Community institutions.

They aim at promoting a strategic approach that goes beyond ordinary projects and programmes by stressing analysis and political dialogue.

Procedures to be followed

2000 marked a turning point in the procedures governing such operations. Previously, applications for co-financing could be received throughout the year. They must now respond to calls for proposals, the first of which was published in June 2000. However, a great number of applications had been received before this system was introduced (i.e., before 30 November 1999). 2000 was thus spent in examining these requests (a total of 1 156: 673 in situ and 483 awareness-raising projects) along with examining responses to the first call.

Furthermore, the overall grants for the period 1993-1996 were closed. This involved 609 contracts covering 9,226 projects.

The overall funding represented a budget of almost € 200 million, of which almost the entire amount has been committed. The actual disbursements amounted to € 164.4 million.

2.2. Decentralised Co-operation

Decentralised co-operation concerns various players, both in Member States and in developing countries: public authorities and local initiative groups, NGOs, various associations, teaching and research institutions, churches, etc.

Operations supported by the EC in this perspective therefore stress different fields. The fields of priority action are:

• training (participatory workshops, transfer of experience and know-how);

• research (joint research programmes, experimental programmes);

• providing information and mobilising players in the presentation and implementation

of programmes;

• identification of potential decentralised players, whose roles and responsibilities must

be defined and who might benefit from management training;

• developing technical and methodological tools to facilitate all these operations.

The Commission may also provide funding of up to 100% for certain operations. Such funding must be justified and, within the context of continued dialogue, relate to collaboration and interface agreements and expert studies. Possible co-financing with other funding providers may be sought, particularly other Member States.

In order to be selected, a project must meet at least one of the five basic criteria of decentralised co-operation:

• the project must emanate from one of the above-mentioned players, which must be

genuinely and actively involved in its implementation;

• a search for consultation and complementarity between the various players;

• the project must be managed by a player that is distinct from the government of the

country in question ;

• the project must be part of a development process and not a one-off operation;

• priority is given to the strengthening of capacities and institutional development.

Selected projects are subjected to detailed analysis (compatibility with the EU cooperation strategy, reliability of the applicant and its partners, viability of the envisaged operation, etc.) by the delegations and by the geographical and technical services;

In terms of commitment, total budget utilisation is around € 3 million. 82 disbursements have been made, totalling more than € 5.5 million.

It may be observed that, as in past years, applicants from the northern hemisphere have received more Community aid than those from the southern hemisphere (two-thirds to one-third).

For each region, the trend of previous years has remained stable:

REGIONS PERCENTAGES

Africa 40%

Pacific 5%

ACP Countries 9%

Latin America 20%

Mediterranean 13%

Other countries 13%

Commitments to developing countries, broken down by Member State. Amounts committed and closed at 30.11.2000

14%

23%

2%

ALLEMAGNE 6%

AUTRICHE

1% BELGIQUE

3% DANEMARK

ESPAGNE

FRANCE

15% 9% FINLANDE

GRECE

IRLANDE

1% ITALIE

1%

0% 7% LUXEMBOURG 1% PAYS BAS

PORTUGAL 17%

ROYAUME UNI

3. W OMEN : EQUAL OPPORTUNITIES

One and a half billion people are living below the poverty line. 70% of them are women*, most of whom are also illiterate

The Fourth United Nations World Conference on Women (Beijing, September 1995) highlighted women’s precarious situation in developing countries and the inequalities they suffer. Socio-economic inclusion, access to resources, opportunities for personal development, the control of assets and decision-making power are all elements which they have difficulty in accessing.

On 20.12.1995 the Council adopted a Resolution on the integration of equality between men and women in development co-operation. 21 This solution stresses that the elimination of the disparities between the sexes represents an essential element of development, from the standpoint both of equality, and of the effectiveness of the aid provided.

This “gender” approach cannot but ensure lasting and equitable development, in that it takes on board all the specific characteristics of men and women, as beneficiaries, players and decision-makers alike.

Community aid 22 aims to supplement and strengthen that provided by other development co-operation tools (intergovernmental and/or national). In allocating this aid, priority is given to strategic activities and initiatives having a potential multiple effect rather than to financing small-scale operational projects.

• * 

  According to the Global Human Development Report (UNDP), 2001.

R EGIONAL BREAKDOWN

• 70% of the “gender” budget has been spent on supporting training, awareness-raising

and development initiatives, mainly in Latin American countries.

• 16% of this budget heading has been used to train and encourage public and private

bodies in ACP countries to support and facilitate the “gender” approach in every area.

• 14% of the grants have been devoted to projects for monitoring and supervising

national plans for implementing the recommendations of the Beijing Platform for Action, in particular in ACP countries.

21 This resolution is based on a Communication by the Commission (COM(1995)0423 i/F) containing

elements of the Action Platform adopted during the Beijing Conference. The Commission has

subsequently (in 2001) adopted a new communication on mainstreaming.

34 3.1. Activities in 2000

The Commission has played an active role in developing the 2001-2006 Action Programme 23 , in particular through its efforts to mainstream “gender” in development cooperation. This programme capitalises on progress and results to date and proposes concrete actions for the next five years. These include taking more systematic account of the “gender” approach throughout the project cycle. The Project Cycle Management Manual was revised during 2000 to give greater prominence to this dimension.

23 This programme is the subject of a Communication by the Commission to the Council and to

Parliament, adopted in 2001 (COM(2001)295 final i of 21.06.2001).

4. F ROM F OOD A ID TO F OOD S ECURITY

For about ten years now, the European Commission has moved from thinking in terms of food aid to thinking in terms of food security, thus expressing a different approach: the concern is now that the poorest and most vulnerable populations be guaranteed permanent access to long-term food supply of good quality. They must also be given the means, wherever possible, to participate in the economic activities of this vital sector.

The transition from classic food aid to the fight against food insecurity was made in 1996, when the Council adopted a Regulation which defines the present legal framework of the “food security” programme of the European Commission 24 . This ruling is a milestone inasmuch as it includes food security in sustainable development and in poverty reduction policies.

It makes possible a global approach to food security by targeting simultaneously supply (increasing agricultural production and/or imports, market information systems and developing the private sector), demand (the diversification and increase of family incomes and the access of vulnerable groups to basic social services) and crisis prevention (early warning system, restructuring buffer stocks).

It also paves the way for strengthening the capacities of active local and national partners (including ministries of agriculture) as well as the development of budget support to beneficiary governments.

In this process, emphasis is placed on various instruments. The most important among them are access to production factors (inputs, seeds, equipment, security of land tenure) as well as to credit and information, the development of non-farming jobs and the diversification of family income, increasing people’s ability to participate in decisionmaking and guaranteeing the rights of communities, all elements closely associated with the treatment of combat poverty.

Lastly, this regulation recognises that priority must be given to targeting the food security programme on the most vulnerable populations and on least developed countries (LDC).

E VALUATION OF THE PROGRAMME

As foreseen in the regulation, in 2000 the Commission had an independent evaluation made of its food aid and security programme. The evaluation showed the relevance of the food security programme in the fight against poverty and the need to maintain it.

In fact, maintaining this specific instrument the support of community efforts in three directions:

In the domain of structural food insecurity (the first step in reducing long-term poverty), the problems caused by insufficient provision of food and specific nutritional conditions.

The need to fill the gap between urgent aid, rehabilitation and development assistance.

The EC commitments through international agreements and multilateral initiatives so as to establish the strategic frameworks of the fight against poverty.

36

The evaluation principally underlined the necessity for coherence, not only in food security but also in other community actions, within the global strategy for each country. In particular, the strategies for each country should take all instruments into account, in a coherent and complementary way.

In order to better measure the impact of this programme, it was recommended that specific criteria and verifiable indicators be developed for all projects and programmes as well as the development of a systematic follow up and evaluation of actions on the ground.

4.1. Food security and existing strategies

In order to be effective, the fight against food insecurity must be conducted with consultation and co-ordination. It must develop opportunities of synergy and complementarity with the different Community development programmes, taking into account the action of other donors. This leads the Commission to respect the international Food Aid Convention.

I NTERNATIONAL F OOD A ID C ONVENTION

This agreement is the reference document for the main donors. It fixes the minimum annual commitments in food aid from the signatory countries * and specifies common rules in order to limit the negative side-effects. As re-negotiated in 1999, this international agreement aims at a better integration of food aid in the overall context of support for food security.

• * 

  Argentina, Australia, Canada, EC and Member States, Japan, Norway, Switzerland, United States.

Community Programmes

The food security programme is applied in different regional areas, each of which has specific co-operation agreements with the EU, on the basis of which opportunities for synergy and co-operation are sought. These regional programmes include the EDF (Africa, Caribbean and Pacific Islands), ALA (Latin America), MED (Mediterranean area), OBNOVA (former Yugoslavia and the Balkans) and TACIS (Newly Independent States). This desire for coherence has now been formalised by the drafting of a single Community strategy for each country, which is vital in ensuring complementarity between the different programmes and co-operation with other financial backers, especially the United States.

Within the Union, Member States approve the strategic guidelines of the food security programme and the funding proposals per country and per partner. There is also a code of conduct on food aid between Member States and the Commission. In practice, coordination is established on a case by case basis, according to the degree of commitment of the donors and the nature of the programmes being implemented.

Specific Agreements

Furthermore, specific co-ordination agreements exist, with a section on food security, with certain donors. Thus in the context of United States-EC dialogue, co-operation between the Commission and the USAID co-operation agency concentrates on seven pilot countries: Bangladesh, Bolivia, Ethiopia, Haiti, Kyrgyzstan, Malawi and Mozambique.

I NTERVENTION C OUNTRIES

Concentrating the interventions of the Commission on the most vulnerable countries has been one of the priorities of the Community food security policy over the last few years. Whether direct or indirect, these interventions target 34 countries, most of which have low incomes and are not self-sufficient in food production. According to the nature of the food problems, these countries are divided into two groups: structural intervention countries and crisis or post-crisis countries.

Structural Intervention Countries

In these 20 countries, the respective governments are motivated to move towards a long term food security policy, which has already been drafted or is still being negotiated. Armenia – Azerbaijan – Bangladesh – Bolivia - Burkina Faso – Cape Verde Islands – Ethiopia – Georgia – Haiti – Honduras – Kyrgyzstan – Madagascar – Malawi – Mauritania – Moldavia – Mozambique – Nicaragua – Niger – Peru – Yemen. Crisis or Post-Crisis Countries

In these 14 countries, the interventions are dictated more by the current economic situation. Supply of food aid, farming implements and seeds predominates, combined with additional technical and financial support, in order to avert the risk of famine or to contribute to the restoration of the social and economic fabric, affected by conflicts. Albania – Angola – North Korea – Ecuador – Eritrea – Liberia – Montenegro - Palestine – D.R. Congo – Rwanda – Sierra Leone – Somalia – Sudan – Tajikistan

4.2. Partnerships

Direct Aid

Close to half of the food security programme funding goes to direct aid. This permits the Commission to intervene in situ, either by funding government programmes via budget support, or else by giving direct support to private or public bodies at the local level.

In both cases, this aid requires a funding agreement between the beneficiary government and the European Commission, specifying the implementation arrangements as well as the conditions to which this aid is submitted. Direct aid is offered only to structural intervention countries in which there is a constructive dialogue with the government, permitting concerted implementation of a national food security strategy. This dialogue also implies varying degrees of co-ordination with the other intervening parties (donors, international and local NGOs, civil society organisations, private sector).

Partnership

Partners Value Indirect Value D irect 196,06 W FP 90,00 Indirect 213,65 Euronaid (O N G ) 48,05

O ther (1) 48,70 IND IR EC T AID O N G 60,00

Total 458,41 U N R W A 13,80 FAO 1,80

T otal 213,65

U N R W A FAO 6% 1%

O N G W FP Indirect 28% 43%

D irect 52%

48%

IN D IR EC T AID

Euronaid (O N G ) 22%

In 2000, direct aid amounted to € 196 million. This aid is concentrated in the structural intervention countries. Examples may be found in the geographical sections.

Indirect Aid

Indirect aid is the second pillar of the food security programme. This permits the Commission to grant financial support to international organisations and nongovernmental organisations in the food security programme intervention countries.

The first beneficiary of indirect aid is the World Food Programme (WFP). Community support is here focused on emergency and rehabilitation programmes – the International Emergency Food Reserve (IEFR) and the protracted Relief and Rehabilitation Programme (PRRO) – for which the WFP can contribute all its added value as was the case, for example, in North Korea and in Ethiopia.

In 2000, the European Commission and FAO signed a co-operation agreement covering certain areas of Africa and Central Asia. This agreement is basically concerned with two approaches: developing and extending the Global Information and Early Warning System (GIAWS) and training southern countries in sectoral policies with a view to multilateral negotiations within the WTO.

The United Nations Relief and Work Agency for Palestinian refugees (UNRWA) in the Middle East is the third international organisation to benefit from indirect aid. Its remit is to guarantee access to basis social services (including health and education) for Palestinian refugees in Jordan, Syria, the Lebanon and Palestine.

NGOs in turn receive a significant share of the indirect aid, which may assume two forms of funding. In the first case, a financial contribution is sent to EuronAid, a collective of NGO partners of the European Commission. EuronAid manages all allocations in produce aid (food aid, inputs, seeds, implements) attributed to NGO products. In the second case, an overall financial allocation is attributed to NGO projects that respond to the structural problems of food insecurity on the basis of a call for proposals.

4.3. Intervention Instruments

The ruling of 1996 authorises a wide range of instruments to support food security. These may take the form of financial aid, food aid, currency facilities and food security support actions. Technical assistance teams composed of experts, agronomists or economists, work in situ to implement the programmes.

Food Aid in Kind

Food aid is intended to meet emergency, post-crisis and rehabilitation situations, or to prevent crises. It may be distributed free to targeted groups who are particularly vulnerable, or be used to reconstitute national buffer stocks. The WFO and the EuronAid NGO collective are the two principal partners who manage these operations. Generally speaking, priority is given to local and triangular purchases rather than to European food produce in order to reduce the risks of market distortion and to participate in the stimulation of the private sector. In the poorest countries or those in the course of rehabilitation, seeds are also distributed – in addition to food – to facilitate the re-settling of displaced persons.

Budget Support

Budget support occurs in two stages. Financial aid, in the form of a currency facility

25 , is paid to the account of the Treasury of the beneficiary government to support the balance of payments. This aid makes it possible to food shortfalls on regional or international markets without threatening currency reserves. The food produce thus purchased is then resold on national markets via private operators, thereby stimulating the role of the private sector at local and regional levels. The funds generated by these sales (in counterpart) are paid to the government’s account (generally the Ministry of Finance) to support public expenses and reforms previously agreed upon in the co-operation agreement between the government and the Commission. Three major intervention categories can be identified: support for institutional reforms, funding of public expenses considered to be priorities by the European Community and targeted aid for specific projects.

Instruments

40

Category Instrument Value

Cereals 56,50 Products: 39% Legumes Other products

Vegetable oil 3,72 8% Powdered milk 7,05 Sugar

6%

Products Sugar 7,05 8% Legumes 7,05

Other products 5,20 Powdered milk Transportation 93,94 8%

Currency facilities Currency facilities 64,70 Support actions 132,70

Food security Tools 9,77 Vegetable oil Cereals

Technical assistance 17,03 4% 66%

Early warning 5,00 Other (1) Other 48,70

Total 458,41

Food Security: 36%

Technical Early warning Autres Produits assistance systems

11% 39% 10% 3%

Tools 6%

Facilités en

Devises Sécurité

14% Aliment Support actions aire 81%

36%

Actions to support food security

Support actions take six basic forms:

National Crisis Prevention Systems

Priority is given to restructuring and reconstituting national buffer stocks, the introduction and maintenance of early warning systems, support for the FAO-managed Global Information and Early Warning System (GIEWS), as well as, where appropriate, the restructuring of specialise food security monitoring and crisis prevention bodies (Niger, Burkina Faso) and the fight against crickets (Madagascar).

Strengthening Capacities

This institutional support can cover a wide range of programmes such as the restructuring of ministerial institutions, applied research, training and local awareness-raising, support in defining sectoral policies (Mozambique), decentralisation policies (Bolivia) and for developing agricultural statistics (Yemen).

Development and Diversification of Production

In this field too, intervention can take many forms, including the development/ restructuring of production and marketing channels and the distribution of tools, inputs, and seeds (North Korea). Actions are also planned to facilitate access to funding and loans for small farmers, and to contribute to land reform (Newly Independent States), reforestation, fighting erosion and other environmental aspects, not forgetting support for processing and increasing added value (Honduras).

Marketing Support

This assistance can take very different forms, including the promotion of export channels and local production, the development of the private sector via currency facilities, the development of infrastructures, restructuring processing industries, strengthening local organisations and farming cooperatives (Nicaragua) and credit assistance to trading enterprises.

Support for Family Incomes

With a view to making good household income shortfalls, food security policy is contributing, among other things, to developing highly labour-intensive work (Cape Verde), the creation of rural jobs, the funding of micro-projects (Mauritania) and the supply of drinking water. It is also supporting basic services and helping to target these at vulnerable women (Bangladesh).

Rehabilitation

As part of the rehabilitation effort, logistic of support is being provided for the return of refugees. This involves providing back-up support in various fields including re-starting farming production (Liberia), reconstituting herds the and free distribution of inputs (Angola).

Technical Assistance

Technical assistants are the cornerstone of the implementation of food security programmes in intervention countries. They are experts in agronomy or economics working in situ, either within a local food security unit or else within the ministry of finance or a technical ministry (agriculture or social affairs). They have a crucial part to play in implementing budget support programmes (including controlling and targeting funded public expenses) and in relations with food security programme partners such as NGOs and civil society organisations.

Geographical distribution

Geographical zones Value ACP Value

Geographical zones ACP Value 236,83 Eastern Africa 144,43 ACP Value ACP Asia 236,83 61,34 Southern Africa Eastern Africa 46,46 144,43

Asia Latin America 61,34 34,31 ACP Central Africa 16,56 Southern Africa 46,46

Latin America NEI 34,31 41,43 Western Africa 22,12 Europe 11,00 ACP Indian Ocean Central Africa 2,61 16,56

NEI Mediterranean & Middle 41,43 24,80 Caribbean Western Africa 4,65 22,12 Europe Other (1) 11,00 48,70 Total Indian Ocean 236,83 2,61 Mediterranean & Middle Total 24,80 458,41 Caribbean 4,65 Other (1) 48,70 Total 236,83

Total NEI 458,41

10,11 Indian

NEI %

Ocean Caribbean Europe Mediterra 1,1% 2,0%

10,11 2,68% nean & Indian Western

% Latin Middle Africa Ocean Caribbean Americ Europe East Mediterra 9,3% 1,1%

a 6% 2,0% 2,68% nean &

8,37% Central Western Latin Middle

Africa Africa

Americ East ACP 7,0%

a 6% 57,80 AC 9,3%

8,37% % P Central

Southern Eastern

Africa

Africa Africa ACP 19,6% 61,0%

57,80 AC

7,0%

Asia % P

14,97 Southern Eastern % Africa Africa 19,6% 61,0%

Asia 14,97

%

4.4. Perspectives

The problem of food security in southern hemisphere countries – particularly in the LDC – cannot be tackled by development aid and international co-operation alone. This is because trade has a very important part to play in food security, at both regional and national levels. In this context prospects of regional integration, which the Commission is seeking to help promote in its re-negotiation of the EU-ACP partnership agreements, are opening up new horizons for food security.

The liberalisation of international trade 26 has important consequences for food security. While it is true that it offer possibilities to southern countries to develop their markets and commercial outlets, the resulting competition between farming systems with widely differing levels of productivity can in fact increase food insecurity. Here it should be observed that, during discussions on farming in 2000, the most active WTO members were the developing countries. The objective of food security in the context of market liberalisation is requiring developing countries both to develop tools for managing their national markets, which can compensate to the competitive imbalance between north and south and to take full advantage of their positive comparative competitiveness and so benefit from better access to the markets of industrialised countries. The European Union has just responded positively to the latter concern by fully opening its interior market to all products, except for weapons 27 from the 49 least developed countries.

26 Particularly since the signing of the Marrakech agreements which led to the creation of the WTO

in 1994.

44 5. AIDS AND P OPULATION

A planetary sickness, sadly shared, AIDS is not experienced similarly everywhere. Its characteristics and consequences vary from one continent to another, and the responses cannot be identical. In developing countries, it demands particular attention to certain socio-cultural and economic realities, in particular women’s daily lives and conditions of poverty. These realities, in many aspects, tie in with the demographic problems which also affect most of these regions.

The size of the AIDS pandemic, which has hit developing countries full force, has required the European Union to intensify its efforts to support their national strategies, with a greater focus on the factors promoting the spread of the sickness. This approach has led, in particular, to initiatives to improve the status of women and strengthen basic communities, who are called on to care for affected families and individuals.

At the same time, most of developing countries find several capacity obstacles to achieve a lasting human development. Unacceptable level of childbirth related deaths and deplorable obstetric conditions are only some of these obstacles. It is therefore urgently necessary to help developing countries implement global demographic programmes and politics covering the entire field of obstetric health.

Alongside the major co-operation programmes with developing countries, the

Community has specific budget headings 28 which since 1990 have allowed it to finance pilot projects and one-off actions that respond to these objectives 29 . This particular effort

moved into higher gear, in 1994, with the Action Programme on Population and Development introduced at the Cairo International Conference, followed by the Beijing Conference and the Cairo plus five process (1999).

For further information

http://europa.eu.int/comm/development/aids/html/policiesnf_fr.htm

28 Budget headings B7-6211 (AIDS), B7-310 (demography) and B7-6212 (AIDS and demography) 29 The principles presiding the selection of activities and the resources used reflect the objectives

indicated in Council Regulation (EC) No 550/97 i (fight against HIV/AIDS) and Council Regulation (EC) No 1484/97 i of 22 July 1997 (aid for population policies and programmes).

O BJECTIVES OF THE AIDS – P OPULATION ACTIONS

AIDS Population

• Reducing the number of new infections • Allowing women, men and adolescents

• Strengthening the health and social to exercise their choice freely, with full

security sectors to face the growing knowledge of the facts, as to the number burdens linked to the expansion of the of children they wish to have and the pandemic spacing of births

• Supporting governments and • Helping to create a socio-cultural,

communities in assessing the social and economic and educational environment

economic impacts of the epidemic that is propitious to the full exercise of this choice, especially for women and

• Developing scientific knowledge about adolescents, in particular by condemning

the epidemic and the project results and eliminating all forms of sexual

• Combating discrimination and social and violence, mutilation and abuse that

economic exclusion of AIDS victims and undermine their dignity and their health.

high risk groups. • Aiding the development or reform of

health systems in order to improve the accessibility and quality of birth-related health care for men and women, including adolescents, thereby significantly reducing the health risks for women and children.

5.1. Activities in 2000

Actions undertaken in 2000 have included the implementation and follow-up of activities launched in earlier years. In December, 70 projects totalling € 55 million were being followed. An external evaluation was produced of activities undertaken between 1997-1999, and a report presented in November 2000.

A call for proposals was published in 19 January 2000. 295 responses were received. This call was a first for these budget headings, being addressed at a wide range of players – in particular NGOs, research institutes, Community organisations and public and private services.

The budget appropriation of € 20.1 million available in 2000 allowed 17 projects to be selected:

– AIDS: 12 projects € 14.1 million

– Population: 5 projects € 5.2 million

Another existing population policy project in the Gaza strip was extended and the budget (€ 800 000) included under this heading.

One project is for research at global level into the development and availability of microbicides. The other interventions divide up as follows between the geographic zones: ACP 6, Asia 7, Latin America 2 and Mediterranean 1. All projects were selected in consultation with the Commission delegations in the countries concerned.

15 high quality proposals which could not be selected in 2000 will be financed out of the 2001 budget.

5.2. Perspectives

The European Union has reconfirmed its commitment to reducing the spread of the AIDS epidemic and continues to adhere to the conclusions of the Cairo Conference (1994). The EC is also contributing to the Global Health Fund. In addition to the implementation of policies to support the health systems in developing countries, special attention is being paid to actions relating to transmissible diseases, in particular AIDS, malaria and tuberculosis, in the context of the fight against poverty. To this end, two Communications from the Commission were prepared to be submitted to Parliament in 2001. In September 2000, a round table was organised to prepare an action plan, which is influencing the programming of the thematic budget headings 6. D RUGS

Prevention, treatment, social and professional rehabilitation of addicts, epidemiological studies, combating money laundering, creation of new legal legislation… The questions raised by the trafficking and consumption of drugs are demanding targeted specific answers as part of a global strategy. These are the objectives of the European Union Action Plan in this field.

Drug use is no longer the prerogative of rich nations, with less advanced countries now fully-fledged markets. Heroin and stimulants consumption is rising fast in Southern Asia, for example. Aside from the attendant problems of corruption and criminality, this consumption is a major vector in the spread of AIDS and hepatitis.

Faced with the world-wide drug problem, the Commission has adopted a global strategy which finds concrete expression in the European Union’s Anti-Drug Action Plans.

2000-2004 A CTION P LAN *

The plan responds to the following objectives:

• ensuring that combating drugs remains a major EU action priority;

• reducing both supply and demand and the negative effects of drug consumption;

• continuing to gather, analyse and disseminate objective, reliable and comparable

information on the drug phenomenon in the EU, with the help of the EMCDDA **

(European Monitoring Centre for Drugs and Drug Addiction) and Europol; ***

• promoting police co-operation between Member States and promoting international

co-operation.

• * 

  http://emcda.org/multimedia/actionplan/cordrogue32en.pdf

** http://www/emcdda.org

*** http://www.europol.eu.int/home.htm

In line with the recommendations of the United Nations General Assembly Special Session on Drugs (UNGASS, June 1998 30 ), Community co-operation is taking three main directions:

• measures to reduce both demand and supply in a balanced fashion;

• the principle of “shared responsibility” between producer, transit and consumer

countries;

48

• making drug control an integral part of development co-operation.

The Commission is currently focusing its actions on the two main routes along which drugs are entering the European Union (see box). In order to achieve a more appropriate response to the problem, it is also seeking to improve its knowledge of the drugs situation in third countries, by financing data gathering projects in these countries.

D RUG ROADS , ROADS OF THE WAR

In 2000, Afghanistan provided nearly 70% of the world production of heroin and Latin America (essentially Colombia) and the world’s entire cocaine supply. The traffic penetrates the world’s two main markets, the United States and Europe, by varying routes. Supplies to the European Union enter via the heroin route (Afghanistan, Iran, Central Asia, Caucasus, Central and Eastern European countries, Turkey, Balkans) and the cocaine route, running from Latin America via the Caribbean.

This traffic passes through countries destabilised by civil war, terrorism and totalitarian regimes. Traffickers exploit this fragility to develop paths along which they are rarely disturbed. In addition, their activities aid certain governments or movements (nationalist, religious, etc.) which use the income from this traffic to finance one or the other conflict or movement *. In addition to drugs, these routes are also used for other criminal activities, such as human slavery.

For example, the conflict in former Yugoslavia has promoted the development of Mafiastyle Albanian organisations and today, over 80% of the heroine seized in Europe passes via the Balkans.

On the cocaine route, in Latin America, the EU is funding preventive projects in nine countries (total budget: € 2 million). In the Andean countries it is supporting a series of initiatives focused on money laundering, control of precursors (chemicals needed for drug production) and legislative harmonisation. It has just started helping the Venezuelan government to set up a national drugs observatory (€ 2 million). In Columbia, the EU is looking to play an major part in the peace process and is contributing to this effort with alternative farming programmes (€ 30 millions out of € 105 million).

In the Caribbean, the EU is providing € 23 million to the Barbados action plan, a series of programmes covering all aspects of the fight against drugs. This initiative is the fruit of a joint approach by the Caribbean countries, the EU, the USA and the United Nations. The Community action is permitting a tighter crack down on money-laundering and cocaine trafficking by increasing marine patrols and creating centrally co-ordinated police, customs and army units. Addict treatment and reinsertion initiatives also receive significant support.

On the heroin route, different courses of action to combat this traffic have been undertaken in Central Asia and in the Caucasus. Programmes to reduce demand are in the pipeline. The EU is preparing a new project based on Iran to prevent drug addiction and to train officials. It is also funding closer co-operation between the countries of central Asia, Iran, Pakistan and Turkey.

• * 

  The role of drug trafficking as a factor of instability is stressed by the Commission in its Communication on Conflict Prevention COM(2001)211 final i).

6.1. Activities in 2000

Today the European Community is supporting a raft of projects to combat drugs in over 100 non-EU countries. These programmes, with projects in excess of € 100 million, include prevention, treatment, the social and professional rehabilitation of addicts, epidemiology, alternative development for drug crop farmers, control of precursors, customs and police co-operation, institutional support for developing national policies, cracking down on money laundering and new legislation.

The Community has also co-financed reports by the l’Observatoire géopolitique des drogues (OGD) 31 , which presents the situation of the drug phenomenon from a global and geopolitical angle. The Commission has maintained its support for a number of projects to reduce drug demand, working together with governments and NGOs. Apart from funding projects involving treatment, re-integration of drug addicts and the reduction of risks associated with drug addiction, it is supporting the setting up of NGO networks which make it easier to identify and spread best substitution practices.

Lastly, the Community is funding several programmes to combat money laundering and is joining the effort undertaken by the OECD in this field.

6.2. Perspectives

The Commission confirms the importance being given to assisting countries outside the European Union in combating drugs. In this context, the Commission has committed to programming its anti-drug action at the countries crossed by the two main supply routes to the European Union. The Commission will continue to develop projects aimed at closer co-ordination both between beneficiary countries and with Member States. In many cases these projects extend actions developed by Member States within the Union.

As the anti-drug action plan stresses, this type of co-ordination is an important factor in the effectiveness of the Community’s action.

The Co-operation Office is playing a central role in developing the mechanisms for coordinating action outside the European Union.

50 7. R EFUGEES AND R EHABILITATION

When a catastrophe or any kind of crisis occurs, emergency relief is the first concern. But what comes next? What happens in the medium and long term? How can these situations be handled on a more permanent basis? Between the initial emergency relief and longer-term development programmes there exists a “grey area”, calling for its own particular type of help. Displaced people, the rebuilding of devastated areas and the hunt for anti-personnel mines are some of these transitional interventions.

The concepts of "linking relief rehabilitation and development" (LRRD), and of "developmental humanitarian assistance" originate in the 1980s when both academics and practitioners voiced concern about the so-called "grey zone" between humanitarian assistance, rehabilitation and development. For this reason, over the last ten years 32 , the Commission has been developing new forms of intervention to address specifically the challenges created by these kinds of situations.

The extreme variety of problems to be confronted led gradually to the creation of a series of diversified tools. Most of these have subsequently been together within a single administrative service at the Commission, in an attempt to achieve more cohesive action in this “link” area.

7.1. Aid to displaced populations: a geographic approach

According to the most recent estimations by the High Commission for Refugees (HCR), the number of displaced persons (refugees, repatriated persons, internally displaced groups) is over 22 million world-wide, 7 million of whom are in Asia and almost 600 000 in Latin America.

Different kinds of displaced populations need international aid

These can be:

• refugees remaining in their initial country of asylum;

• internally displaced persons who have to survive outside their original village and

region;

• people repatriated from outside or inside their home country;

• demobilised military and similar people;

• populations living around refugee camps in their initial asylum country, whose

economic situation cannot remain permanently inferior to that of the refugees living alongside them;

32 Particularly since its communication to the Council and Parliament 1996 (COM) 153 final of

30.04.1996

• populations who have remained in departure areas and who must be helped lest they

swell the number of refugees.

Perspectives

Following the assessment of the implementation of the Regulation governing aid given to displaced populations in Asia and Latin America 33 ,the Commission has decided to maintain this tool which has shown its usefulness. A new Regulation proposal has been communicated by the Commission 34 and should be approved by the Council in 2001.

7.2. Rehabilitation actions

Community rehabilitation and reconstruction actions for developing countries are for a limited period. They "shall be designed to help re-establish a working economy and the institutional capacities needed to restore social and political stability to the countries concerned and meet the needs of the people affected as a whole. The operations must progressively take over from humanitarian action and pave the way for the resumption of

medium-term and long-term development aid” 35

Perspectives

In the medium term, the intention is that rehabilitation projects should be implemented under the major regional co-operation instruments, while bearing in mind the specific character and the urgency of these projects.

Until then, continuity will be given to rehabilitation programmes financed under specific budget headings, such as the rehabilitation programme for the areas struck by Hurricane Mitch (Central America) or for the Province of Gujarat (India), which suffered a major earthquake in early 2001. In the latter case, the Community action will involve essential support for NGOs working to reconstruct the local economy (budget for 2001: € 15 million).

The fight against anti-personnel landmines

The cowardly recourse to anti-personnel landmines creates victims among soldiers and the civil population, particularly children. Buried in the earth, they continue to kill long after hostilities have come to an end. 60 to 110 million landmines remain active in around 60 countries. The children of Afghanistan, Angola, Cambodia, Iraqi Kurdistan, Rwanda, the Balkan region (and many other places) are their prime victims. With on average 500 people still being wounded every week, this endless war requires a relentless

international response. For several years now, funds 36 have been allocated to the fight

against anti-personnel landmines. After the Ottawa Convention came into effect on 1 May 1999, the EC approved a communication to the European Parliament and Council as well as a draft regulation on this problem. This communication proposes an increased

33 http://europa.eu.int/eur-lex/fr/com/rpt/2000/com2000_0367fr01.pdf)

34 http://europa.eu.int/eur-lex/fr/com/pdf/2000/fr_500PC0831.pdf)

35 Council Regulation No 2258/96 i of 22/11/1996 on Rehabilitation operations (published in OJEC

No. L 306 of 28/11/1996). Different budget headings correspond to this ruling: B7-303 (Asia), B7-304 (East-Timor), B7-313 (Latin America), B7-431 (Mediterranean area), B7-522 (New Independent States), B7-641 (ACP countries). Certain budget headings on technical and financial

co-operation also permit funding of rehabilitation projects.

52 contribution from the EU to the fight against this scourge, which particularly affects the poorest countries. When approved (this is expected in late 2001), this text will form the legal basis for future project funding and should increase the cohesion of interventions in this field. More particularly, the Commission will make sure specifically funded mine clearance projects are complementary to those supported by major regional co-operation programmes and to Humanitarian Aid activities.

Various programmes have received support in the countries and regions most severely affected by anti-personnel landmines, particularly Afghanistan, Angola, Bosnia and Herzegovina, Cambodia, Croatia, Laos, Northern Iraq, Kosovo, the Lebanon and Mozambique.

A budget of €7.8 millions has been split, half for the ACP countries and half for the rest of the world (principally the Balkan region and South East Asia).

Further information:

CE projects

http://europa.eu.int/comm/external_relations/mine/publication/en.pdf

Community Regulation:

http://europa.eu.int/eur-lex/fr/com/pdf/2000/fr_500PC0111.pdf

8. E NVIRONMENT AND FORESTS

Poverty is not simply the lack of financial resources. It is also the result of difficulties in accessing the riches of nature – water, land, forests – not forgetting the influence of the climate.

The Community and its Member States are well aware of the direct effect that the exhaustion of natural resources and environmental degradation have on economic development, and in particular on local communities’ continued subsistence.

With this in mind, an initiative to support the environment in developing countries was started in 1982. Initially limited to combating desertification, this budget heading has steadily expanded to become a fully-fledged instrument for actions which help integrate the environmental dimension in the development process.

F ORESTS OF SURVIVAL

Over one billion people live in situations of extreme poverty. About a quarter of them are almost entirely dependent on forests for their subsistence and survival. Another one billion people living in poverty depend on wooded areas for their food, for fuel for heating and for animal food production. The annual shrinking of the overall surface of forests, estimated by the FAO as 0.2% (or 94 000 sq. km) therefore represents a considerable threat to these people. Furthermore, the negative impact this galloping deforestation has on biodiversity and climatic conditions also penalises the planet as a whole.

This development was influenced, in particular, by the Rio Conference in 1992, which adopted a strategy for sustainable development. Indeed, it was as part of the preparations for this Conference that the budget heading for the conservation and sustainable management of tropical forests and other forests in developing countries was created in 1991.

8.1. Theme headings, specific headings

The total appropriations devoted to the environment 37 and to forests 38 for the period from

2000 to 2006 are € 93 million and € 249 million respectively. This may not seem much compared with those made available to the geographical financial instruments (European Development Fund, the Asia, Latin America and Mediterranean plans), which can also finance actions in the same areas.

37 Budget heading B7 – 6200. The Council (by Regulation no. 2493/2000 i replacing the EC

Regulation no. 722/97 i of 24 April 1997) aims to encourage environmental measures adopted in developing countries and to contribute to environmental concerns being taken into account in

Community development co-operation programmes.

38 Budget heading B7 – 6201. By Regulation no. 2494/2000 i (replacing EC Regulation no. 3062/95 i

of 22 December 1995) the Council aims to support operations in favour of the preservation and the sustainable development of tropical forests and other forests in developing countries. Both

budget lines, B7-6200 and B7-6201 are merged in 2001

The environment and forests thematic actions nevertheless present specific advantages, since they make it possible to:

• sustain global and regional initiatives, particularly in relation to international

conventions on the environment (climatic change, biodiversity, desertification) or international agreements;

• have a flexible choice of partner states (including medium income countries) of global

importance for the environment such as Mexico, Brazil or certain South-East Asian countries;

• give direct support to NGOs and the civil society organisations of developing

countries;

• commit to pilot initiatives.

8.2. Forests and environment activities in 2000

Following up about 230 projects in progress 39 was the main task during the year.

31 new projects received funding approval, to a total of € 32.1 million. Because the new legal bases were adopted late by the Council, in November 2000, the budget appropriation could not all be used during the year. The sum of € 13 million was thus carried forward for the 2001 budget.

The Commission’s contribution varies from € 0.2 million to € 2 million per project, with an average of € 0.7 million for environment and € 1.1 million for forest projects.

Six projects received major support of over € 1.5 million:

– farm forestry and natural resources conservation project around the Arabuko Sokoke – Goshi, Coast Province of Kenya (€ 1.6 million);

– creating agarwood supplies in Vietnam (€ 1.7 million),

– community forestry support project in South East Asia (€ 2 million),

– development and demonstration of sustainable forest management applied by community and other non-governmental forest managers in Belize (€ 1.6 million);

– consolidation of the socio-environmental information system for the forest regions of Brazil (Brazil, € 1.9 million),

– supporting sustainable livelihoods for rural and forest communities (Bolsa Amazônia project, € 1.6 millions).

55 Geographical distribution of support by regions and by programme

Global

Global 7% Africa

22% Caribbeans 24%

8%

Caribbeans

2% Africa 47%

Latin America Latin America 9% 27%

Asia Asia 20% 34%

Environment (€ 12.3 Million) Forests (€ 19.8 Million)

ENVIRONMENT FORESTS

Africa 5.899.265 48,1% 4.748.603 24,0%

Asia 2.433.159 19,8% 6.634.313. 33,5%

Latin America 1.048.348 8,6% 5.361.714 27,1%

Caribbean 206.200 1,7% 1.595.115 8,1%

Global 2.670.872 21,8% 1.472.778 7,4%

TOTAL 12.257.844 100% 19.812.523 100%

8.3. Perspectives

2000 was a year dominated by the reformulation of rulings and procedures. Guidelines and priorities were fixed for the implementation of operations in 2000 and 2001, including the financing of projects directly sent by beneficiary countries’ national and regional authorities and other International Organisations.

A call for proposals – mostly addressed to civil society operators – was published in January. It was closed on 14 May, having been a great success. Over 600 projects must be analysed by the Commission, to examine their degree of conformity with the objectives and priorities and their quality. The most important activities of 2001 will be evaluating these projects, choosing them and then getting them under way.

III South-Eastern Europe:

The Balkans

During the 1990s, democracy took root across much of Central and Eastern Europe, but war descended on the Balkans. Today, the European Union is playing a central role in repairing the damage of conflict, and equipping the countries of the region to sustain democracy and the rule of law, and to establish steadily closer ties with the European Union.

Each of the countries of the region - Albania, Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia and the former Yugoslav Republic of Macedonia - is a potential candidate for membership of the European Union. Our policy - known as the Stabilisation and Association process - is designed to help each of the countries of the region to implement fundamental economic and political reforms, and to make progress along the “road to Europe”.

Our contribution is on a substantial scale, recognising that the Balkans are part of Europe, and that the future of the region is intimately linked to that of the rest of the continent.

The EC is the largest single donor in the Balkans, spending through the CARDS programme over € 839 million in the region in 2001 alone on top of € 956 million in 2000. Given the emergency in the region in 2000 involving Kosovo, the programme has been front loaded.

€ 4.65 billion has been earmarked for the Balkans by the Commission between 2000 and 2006, reflecting the priority the Union attaches to achieving lasting peace and stability in the region. Contributions from Member States are on top of these sums, and are approximately as much again. 28,000 troops from EU Member States and 800 civilian police are serving in the region, helping to keep the peace as work proceeds to establish strong institutions and promote regional co-operation so that their presence is no longer required.

EU assistance is focused on helping the countries to implement the Stabilisation and Association Process - namely, stabilising their internal economies and political relations, promoting regional co-operation between the countries and facilitating closer association with the EU. The specific support is tailored according to the differing needs of each country. It ranges from budgetary assistance and humanitarian aid, to help with needs in reform and judicial and police training, to border and customs co-operation, political relations, and public administration, legal and economic reform. The European Investment Bank contributed € 154 million in loans to the different SAA (Stabilisation and Association Agreements) in the region: 120 for Bosnia and Herzegovina, 34 for Albania.

The Stabilisation and Association process draws heavily on experience in the candidate countries, and offers each of the Balkan countries a demanding contractual relationship (SAA) with the European Union in which the Union undertakes to assist them in implementing reforms, in exchange for a proven commitment on the part of each country to carry out such reforms.

The year 2000 saw dramatic progress in the Balkans. In January, Croatian voters elected a moderate, reforming government committed to forging much closer ties with the EU; the Union responded by immediately upgrading its relationship with Croatia, and by offering considerable assistance. From Belgrade, Slobodan Milosevic responded by increasing political pressure on the democratic government in Montenegro, and by cracking down on the independent media in Serbia. The European Union - with others - provided considerable help to enable Montenegro to withstand that pressure, and to frustrate Milosevic’s efforts to de-stabilise the republic; and offered a financial lifeline to the independent media. On 5 October 2000, following national elections the Serbian people removed Slobodan Milosevic from power, opening the way for the return of the FRY to the European family of nations, and to a transformed relationship with the European Union. The European Commission responded rapidly, putting together a massive package of assistance designed, above all to help impoverished Serbia through the winter, and to reinforce its fragile new democracy. That practical assistance, was rolling into Serbia within a few weeks of Milosevic’s departure.

During the year, the European Union dramatically stepped up its performance in the region.

• A new and simpler regulation - the Community Assistance for Reconstruction,

Development and Stabilisation (CARDS) - replaced, in December 2000, the OBNOVA and PHARE 40 programmes, which had previously governed the bulk of EC

assistance to the Balkans

• The European Agency for Reconstruction was set up in March 2000 After Milosevic’s

departure, the EAR’s mandate was extended to cover the delivery of EC aid in FRY.

• Following an initiative by the Commission, the European Union opened its entire

market to exports from the Balkans in November 2000. This bold initiative will help to kick start economies in the region.

• Negotiations for an SAA were completed with FYROM, and an SAA with FYROM

was initialled in November 2000. The Commission recommended the start of negotiations with Croatia, and worked closely with Albania and Bosnia Herzegovina, and, after Milosevic’s departure, with the FRY, to prepare these countries for

negotiations in due course.

58

The table below offers a snapshot of our programmes :

WESTERN BALKANS

COMMITMENTS PAYMENTS

Available Consumed % Available Consumed %

€ '000 € '000 € '000 € '000

Ex-Yugoslavia 313.542 313.140 99% 348.129 348.127 100%

Western Balkans 6.090 5.490 90% 245 0 0%

– ATA *

Western Balkans 62.330 62.300 100% 100.005 100.005 100%

Kosovo 410.000 410.000 100% 205.832 205.756 100%

Transitional civil 9.958 9.958 100% 9.000 8.760 97% administrations

Ex-Yugoslavia – 5.840 5.840 100% 927 58 6% ATA *

Total 807.760 806.728 100% 664.138 662.707 100%

• * 

  Technical, administrative (ATA) and support expenditure covers necessary costs for the assistance to implementation of the Tacis and Cards programmes; for analysis, pre-feasibility and feasibility studies related to the programming of the main budget lines; and for information collection and dissemination and public awareness.

1. A LBANIA

Albania suffers from obviously weak public institutions, which has contributed to serious instability in the past and which, if not sufficiently strengthened, pose a serious threat to its prospects of developing a closer relationship with the EU in the future. We are

working with Albania to tackle these problems.

A large proportion of EC aid is being spent on administrative reform and on helping the

national authorities establish the rule of law.

€10 million was devoted to this in 2000, including logistical support for building up government administration, the national judicial system and police force, and to help put in place a functioning customs administration capable of collecting the revenue needed to fund the state. € 2.5 million was spent on Tempus inter-university co-operation projects, and € 2.2 million was used to support the Stabilisation and Association process. In all, €

34.4 million was allocated to Albania in 2000, of which €1.5 million was spent.

In addition, this country received, in 2000, Humanitarian aid to an amount of € 3.4 million, concentrated on rehabilitation of health and education facilities, as well as water and sanitation networks in deprived areas.

J UDICIAL REFORM IN A LBANIA

Albania’s serious civil unrest in 1997 clearly demonstrated the need to reinforce the capacity of the national police force. The EU played a crucial role here, working together with the Council of Europe helping with the training of judges and prosecutors (new school for magistrates) and setting up the State Publications Centre (new Official Journal). The death penalty was abolished and an ombudsman institution (People’s Advocate) was created. This will strengthen the quality of the legislative process. It will also train more legal professionals and ensure that Albania’s judicial institutions function correctly.

P OLICE TRAINING

MAPE was the multinational Advisory Police Element - provides advice and training to the Albanian police. In 2000, the EU provided new uniforms, police vehicles, spare parts and protection devices. It also renovated several police training centres (like those in Tirana and Durres for example), and equipped them to host intensive training sessions lasting eight to nine weeks. So far, MAPE has trained some 7 000 police officers drawn from all ranks, including 60 senior managers. The next step is to equip the police with modern information technology. The EU is also helping the Albanian authorities to draw up professional police regulations and new laws on the policing of economic crime. From September 2001, an EC Police Assistance Mission to Albania replaces MAPE up to June 2002

Agriculture

Land distribution and market liberalisation are two areas where, over the past few years, considerable progress has been made in the reforming the agricultural sector. However, major challenges remain. New legislation must be enforced, and the right market and service infrastructures still need to be developed to meet new farming needs. The EU is providing technical assistance to help this, and advising the Ministry of Agriculture on modern agricultural policy and techniques.

2. B OSNIA AND H ERZEGOVINA (B I H)

The return of refugees and displaced people to their homes remains a key priority for EU aid to this country, which received a total of € 103 million in aid during 2000. Special efforts were made to return people to the Republika Srpska in eastern BiH, and also to encourage cross-border returns from Croatia.

Helping refugees and internally displaced persons to return involves more than repairing houses and homes, however. It means helping to ensure that returnees also have jobs, schools for their children, healthcare, social security and other services. In this type of integrated return project the EU relies heavily on the involvement of NGOs.

To date (1996-2000), the EC has rebuilt over 21 150 houses all over the country as part of its major effort to help people return to their homes.

Economic regeneration

BiH’s post-war boom was largely due to donor reconstruction. But over the last two years GDP growth rates have fallen to below 10%, from a very low base; the situation compounded by negative trade balances, as imports continue to outstrip exports. Only Albania has a lower level of Foreign Direct Investment (FDI). To prepare BiH’s future integration in the EU. EC assistance over the next five years will help BiH to make the transition to a market economy, and lay down the foundations for sustainable development.

Through the Quick Impact Facility project system, the EC provided € 5.5 million for grants and technical assistance to SMEs. As a result, 1200 new jobs were created in return areas throughout Bosnia and Herzegovina.

The European Commission’s approach to encouraging economic development in this country focuses on the following:

– creating a single market between Bosnia’s entities, in line with EU standards and institutions;

– supporting structural reforms to prepare for the transition to a market economy;

– stimulating the development of the private sector, especially SMEs

– ensuring that both local economic development and refugee returns are sustainable.

Agriculture, forestry, and the environment

The EC has helped the veterinary services of both Bosnia and Herzegovina to work together to ensure better health and management of livestock, which will increase consumer confidence and also trade

BiH potentially possesses one of Europe’s largest natural forest covers. But some of these ‘forest lands’ are currently bare and threatened by desertification, as well as mines. With EC aid, 1350 ha have been reforested (750 ha directly funded by the EC, the rest financed bilaterally by Italy).

In the aftermath of a serious war, the protection of BiH’s abundant natural resources has fallen even lower on the political agenda. With EC encouragement, a set of new environmental protection laws was drafted and is no being discussed with all stakeholders.

R EBUILDING NATIONAL INFRASTRUCTURE IN B OSNIA AND H ERZEGOVINA

The public utilities are now up and running. Many major EU-funded countrywide reconstruction projects were completed during 2000. Water and electricity networks were repaired, bridges rebuilt, mines were cleared, kilometres of roads rehabilitated, hospitals rebuilt and equipped, schools, kindergartens and universities reopened and telephone lines restored. Sarajevo airport was substantially upgraded, following similar improvements made in previous years to the airports at Mostar and Banga Luka.

Mostar and Sarajevo: The extensive war damage inflicted on these two cities required several integrated reconstruction programmes. The results are already visible with new houses, public buildings, and restored networks for water, energy and transport.

Reconstructing Bosnia and Herzegovina: The war inflicted substantial damage to Bosnia’s physical links to the rest of Europe. The EC has funded the repair and rebuilding of many bridges, including the bridges across the Sava at Gradiska, Benska and Brcko.

3. C ROATIA

Parliamentary and presidential elections in January 2000 resulted in a change of government in Croatia and brought a dramatic change in the political climate. These changes have offered the opportunity for rapid progress in the relationship between Croatia and the EU. The EU responded swiftly. There was an immediate increase in contacts between the EU and Croatia. The status of the European Commission’s office was upgraded to a Delegation, and the EU agreed in November 2000, to open negotiations with Croatia for a Stabilisation and Association Agreement.

The main priorities for EC aid in Croatia are ethnic reconciliation and the return of refugees, support of democratic principles and the Stabilisation and Association process, which has already been negotiated.

€10 million of the total €18.54 million budget for 2000 was set aside for refugee return. The Croatian authorities were given another €3 million for technical assistance to help carry out vital reforms in key sectors such as: European integration, justice, public administration reform, SMEs, statistics and regional development. A further €2.34 million were provided for promoting SME and craft businesses. The € 18.54 million total also includes € 1.5 million support, to the TEMPUS inter-university co-operation programme given by PHARE in 2000. To this must also be added € 1.5 million for technical and administrative assistance to support programme implementation.

Reconstruction and return of refugees and displaced persons

Reconstruction aid is concentrated on the formerly war-torn areas in Croatia, namely Eastern Slavonia and former sectors North and South. As elsewhere, the EU promotes an integrated approach to the return of refugees and displaced persons and construction of houses therefore goes hand in hand with the rebuilding of health centres and schools, sustainability measures and efforts for the revival of small business. The 2000 programme which will come to an end in Spring 2002 aims to provide housing and other assistance for the return of approximately 2,500 refugees and internally displaced people.

4. T HE FORMER Y UGOSLAV R EPUBLIC OF M ACEDONIA – FYROM

A major milestone in the relations between the EU and the Former Yugoslav Republic of Macedonia was the negotiation of a Stabilisation and Association Agreement which was initialled in November 2000. Also in 2000, an asymmetrical trade regime was agreed. The enhanced relations between the EU and FYROM were marked by the upgrading of the Office of the Resident Envoy to a permanent Delegation.

ECHO allocated € 5.36 million to the country still affected by the aftermath of the Kosovo crisis.

The main priorities for assistance in 2000 were to bring the country closer to EU standards and principles and to assist it in the framework of the Stabilisation and Association Process.

Strengthening of government institutions and improvement of infrastructure are key aspects of assistance which will enable the Former Yugoslav Republic of Macedonia to benefit from the Stabilisation and Association Agreement and comply with its obligations.

The national programme of €16.2 million focused on financial sector reform, approximation of legislation, Justice and home affairs, integrated border management, support to data processing of the population and agricultural censuses and education.

€ 1 million was provided as the first part of the Commission's contribution 41 to the construction of the South East Europe University in Tetovo. This University will be the first one providing tuition in the Albanian language in the country, thus seeking to address one of the long standing grievances of the Albanian population.

In addition to the national programme, € 4 million were provided for upgrading Blace border crossing, which is the main border crossing between Kosovo and FYROM. Upgrading of transport routes and border crossings is key for economic development, as FYROM is an important transit route for goods and people between the Balkans and the EU.

C ROSS - BORDER CO - OPERATION BETWEEN FYROM AND G REECE

FYROM’s geographical position is important in the context of the TransEuropean Network (TEN) of cross-continent road routes. The TEN ‘Corridor X’ links the cities of Thessalonica, Skopje, Belgrade, Zagreb and Munich/Passau. To renew trade links, the EU has funded the modernisation of two critical border crossing points and also the upgrading of several stretches of Corridor X inside FYROM borders.

Modernisation of Bodgorica Border Crossing (CBC)

The rebuilding of this important border crossing was completed in October 2000 with an EU contribution of €3.16 million. A new heavy vehicles terminal was added with all modern customs and inspection facilities. A further upgrading is planned, with new buildings for veterinary and plant health inspections.

Modernisation of Medjitlija Border Crossing

The EC contributed around €2.46 million towards building a completely new border crossing, with full customs and police facilities

Upgrading of road E75

The section of road from Gevgelija to the Greek Border near Bogorodica was completely upgraded by September 2000 with CBC funding of €5.68 million. Another section, nearly 10 km long between Negotino and Demir Kapija, is being upgraded in two phases at a cost of €14.6 million. This leaves the final section between Demir Kapija and Gevgelija, for which the necessary design and tender documents were ready at the end of 2000, at a cost of €2.7 million.

63 5. T HE F EDERAL R EPUBLIC OF Y UGOSLAVIA – FRY

Serbia

Emergency assistance programme

Following the transition to democracy in Serbia, the EC launched an emergency assistance programme for Serbia in November 2000. The programme, with a budget of €180 million provided support in a range of sectors, notably energy, health care and food commodities. It came after the already existing EC Humanitarian Aid to Serbia (€ 50.45 million in 2000). The Commission services worked fast to put the emergency package together and the delivery on the ground started in record time, making a major difference in people’s lives during the winter months. Within the package, a contract worth €25.4 million was signed with the World Food Programme to provide 15,000 tonnes each of sugar and sunflower oil, two basic commodities for which there were shortages, at affordable prices to consumers in Serbia. Funds generated from the sales are being used to form a counterpart fund for the regeneration of Serbian agriculture.

Montenegro

Montenegro had differentiated itself from the Milosevic regime by pursuing a path of political and economic reform under its democratic-oriented government. The EU provided direct and continuing support exempting it from the sanctions regime against the FRY and supplying substantial material and technical assistance.

Thus, the EC contributed to the alleviation of government expenditures (social welfare payments, €13.4 million, electricity imports, €2.5 million, and expenses linked to the hosting of the displaced persons linked to the Kosovo crisis €13 million. The EC also provided exceptional macrofinancial assistance, €20 million, helped modernise infrastructure and supported the media, NGOs and democracy. There were key projects in the areas of tax reform, revenue collection, SME development, basic education and support to Government co-ordination structures.

As part of direct assistance for rural development, more than 1 000 pregnant cows were delivered by the EU directly to rural families living in difficult situations in Montenegro.

€ 9 million of humanitarian assistance were allocated to Montenegro to allow it to cope with the caseloads of refugees and IDPs.

Kosovo

The European Agency for Reconstruction has been responsible for the management of the main EC assistance programmes in Kosovo since it was established in February 2000. For the 2000 Kosovo programme of € 263 million (including € 51 million committed in December 2000), 79% of funds were contracted and 55% of these paid by 31 December 2000. Over half of the programme concentrated on energy and public utilities, while a further quarter of it concentrated on the reconstruction of houses.

The Agency undertook the reconstruction of some 8,500 houses with € 60 million allocated in 2000, bringing the total number of houses repaired/reconstructed in Kosovo with EC funds to 12,000. This has secured homes for more than 100,000 people, while also supporting the local and regional building industry.

The poor state of Kosovo’s main power stations near Pristina necessitated that the Agency implemented a € 121 million programme in the energy sector, including a major overhaul of one power station and equipping of the adjacent coal mines which feed the power stations. Funds were also provided for the import of electricity and the establishment a management team for the energy sector. Responding to the serious state of neglect of Kosovo’s road infrastructure, the Agency focused in 2000 on the key transport axes with € 15 million, rehabilitating 180 km of roads and four bridge, while work began on a major upgrade of the Blace border crossing with FYROM .

In support of enterprise and employment generation (€ 15 million), the Agency, together with the World Bank, created a € 7.5 million credit scheme for small and medium-sized enterprises. In addition, the Agency launched a clean-up operation of the Trepca industrial complex, and conducted an environmental and technical audit of the Zvecan lead smelter. In order to assist rural livelihoods and the vital agriculture sector (€ 13 million), some 40,000 tons of fertiliser and seeds were imported and sold to farmers at reduced prices, with the revenue placed in a rural credit scheme to assist farmers.

In support of civil administration in Kosovo, the Agency assisted UNMIK in the task of rebuilding local administration by rehabilitating municipal buildings, providing equipment and technical expertise. In order to facilitate the issuing of new identity documents, specialist equipment was procured.

In the health sector, Agency programmes for € 10 million facilitated the modernisation of the Kosovo blood transfusion service, and provided financial and technical assistance to support reform of health care and the modernisation of the pharmaceutical sector. With regard to water and the environment, a programme of support for essential public utilities was launched. This programme includes improvements to sewage treatment and disposal, and to the quantity and quality of the water supply. It is contributing to the rehabilitation of water installations, emergency repairs, and the procurement of equipment for the municipal water companies.

In 2000 and in addition to other EC assistance, € 26.8 million were allocated to Kosovo to cover the humanitarian needs of the population, in particular during the winter period. Rehabilitation of houses, schools, rural water and sanitation works were undertaken by ECHO.

6. H ORIZONTAL POLICIES

European Initiative for Democracy and Human Rights

Central and Eastern Europe, republics of former Yugoslavia

In this region torn by years of war, the development of democracy necessarily involves supporting the peace process and calming tensions. The budget aid covers, in particular, support for organisations working to re-establish democracy in civil society and to stimulate inter-ethnic dialogue in specific geographical areas. Also supported, in a more general fashion, are projects that encourage press and media freedom, promote equality between men and women and protect the most vulnerable groups in society. Altogether, €

The media in Kosovo

65 What is freedom without a free press? What type of ethics govern the media? To what extent is a journalist pushing a party line an objective journalist? 120 people working in private and public radio stations in Kosovo will be taking professional training including a specific course in professional ethics. This initiative is benefiting from a grant of € 385 000 to Internews Europe in favour of Kosovo Independent Radio. This project is intended to make it possible to continue developing an independent local radio station (information channel reaching most towns in Kosovo) and to boost the capacities of municipal radio stations.

The Roma culture

The project Encouraging a global approach to Roma-related questions, is helping the governments of Bosnia-Herzegovina, Croatia and the former Yugoslav Republic of Macedonia develop and implement policies to improve the conditions of the Roma. The project is based on the Council of Europe’s experience and the initiatives it has been carrying out in Central and Eastern Europe since 1994. With a grant of € 248 000, this organisation will be organising various round tables, brainstorming sessions, discussion groups and studies of existing legislation.

Parliament, NGOs and civil society

How can working relations between parliaments and NGOs be improved? East-West Parliamentary Practice Project, a Dutch-based NGO, which boasts solid experience in the area of parliamentary assistance, has just launched its “Legislative Assemblies and Citizens” initiative in various Balkan countries (Albania, Bulgaria, Croatia, Bosnia, republics of the former Yugoslavia, the former Yugoslav Republic of Macedonia and Romania). The aim is to create a framework for interaction and co-operation between parliaments and civil society organisations in order to allow the development of a true representation of democratic interests. The project, which is receiving € 1.27 million of support, also involves local partners, such as the Albanian Human Rights Centre, the Foundation for Democracy in Bosnia-Herzegovina, the Foundation for a Free and Democratic Bulgaria, the Helsinki Croatia Committee for Human Rights, the Serbia European Movement, FORUM (ARYM), the Centre for Democracy and Human Rights in Montenegro and the Association for Democracy in Romania.

Humanitarian aid (ECHO)

ECHO, the European Community Humanitarian Office, has adopted several financial decisions concerning Humanitarian Aid to this Region for a total of some € 98.7 million in 2000. So far, ECHO has implemented humanitarian assistance for over € 2.3 billion in the region since 1992.

7. C ONCLUSIONS AND PERSPECTIVES

EU activities in the Western Balkans have expanded rapidly, now that democratic governments have been elected in Croatia and the Federal Republic of Yugoslavia while the level of EU activities in the NIS for example, remains broadly unchanged. The more favourable political climate in the Western Balkans is reflected in the doubling of assistance from 2000 to 2001: from about €400 million through the Obnova/Phare programmes to €800 million through CARDS, their successor programme. The European Agency for Reconstruction is well staffed and was therefore able to deliver EC emergency and reconstruction assistance speedily and effectively in FRY during 2000.

The CARDS programme in the Western Balkans will continue to be a large; politically sensitive and visible EC assistance programme. However, in an environment of rapid and recurring political tension, it will be a major challenge to continue speedy and effective delivery of the right sort of assistance. Gradually, as stability begins to return to the region, our assistance is focusing less on emergency support and reconstruction, and more on a broad-based and sustainable development, in particular, on institutionbuilding. This assistance is embedded in the overall framework of EU relations; it is being used to further the objectives of the Stabilisation and Association Process and the growing number of Stabilisation and Association Agreements signed, or under negotiation, with the countries in that region.

IV The Partner States of Eastern Europe

and Central Asia

Armenia Azerbaijan Belarus

Georgia

Kazakhstan

Kyrgyzstan

Moldova

Russia

Tajikistan Turkmenistan Ukraine Uzbekistan

The EC aims to build a long-term relationship with Armenia

the partner states of Eastern Europe and Central Azerbaijan

Asia in which respect for democratic principles and Belarus

human rights and the transition towards market Georgia

economy are supported. These objectives are Kazakhstan

integrated into Partnership and Cooperation Kyrgyzstan

Agreements (PCAs) with most of the partner Moldova

countries and the Common Strategies for Russia and Russia

Ukraine, and form part of a proximity policy,

reflecting the political and strategic importance of Tajikistan Turkmenistan

the region to the EU. They are also the basis for the Ukraine

regulation (99/2000 i) which governs the co-operation Uzbekistan

programme, Tacis. and

Mongolia

1. P OLITICAL AND E CONOMIC R ELATIONS

The region is of key importance to the EU. With the EU enlargement process eastwards, the EU and Eastern Europe will share a common border, requiring joint approaches to many issues that directly affect the EU. The partner countries are also important trading partners and energy suppliers.

Since the beginning of 1990s, the relationship with the partner countries has become broader. The political dialogue has been formalised through the Partnership and Cooperation Agreements (PCAs), now in force with nine of the thirteen countries. A PCA is a legal framework setting out the political, economic and trade relationships between the EU and the partner country concerned. The implementation of the PCAs is carried out through specific institutions on ministerial, senior official and working level. For each of the PCAs, specific priorities and targets have been set, based on the overall objectives of consolidation of democracy and human rights, development of close political and economic relations, transition towards market economy and social, financial and cultural co-operation. As a stepping stone to full agreements, trade and co-operation agreements are still in force with some of the partner countries.

Other instruments under the Common Foreign and Security Policy include the EU’s Common Strategies for Russia and Ukraine which aim to strengthen coherence between Community and Member State policies and actions regarding these countries. The Northern Dimension concept, for which an Action Plan for 2000-2003 was adopted by the Feira European Council in June 2000, contributes to reinforced collaboration between the EU, the Baltic Sea region and Russia, thereby promoting security, stability, democratic reforms and sustainable development. The Action Plan highlights as particularly important environmental issues, including nuclear safety, fight against organised crime and Kaliningrad, a future Russian enclave within the EU.

2. T HE T ACIS ASSISTANCE PROGRAMME

The EC, together with its Member States, is the largest provider of assistance to Eastern Europe and Central Asia. Tacis is the main Community instrument supporting the countries in the strengthening of democracy and the rule of law, in the consolidation of a market economy and in the strengthening of administrative capacity, in particular linked to the implementation of the PCAs.

In January 2000, a new phase of Tacis was launched with the entering into force of the Council Regulation No 99/2000 i for the years 2000-2006. This new phase builds on the achievements of the past decade, but makes adjustments on the basis of experiences gained and on the increasingly differentiated development of the partner countries. This involves inter alia focusing on fewer and larger projects, on improved programming and on a dialogue-driven rather than demand-led process ensuring that priorities are determined by the common interests of the Community and the partner countries.

The Tacis programme is mainly focused on bilateral co-operation with each of the partner countries. It is based on national indicative programmes, agreed with each partner country and valid for 3-4 years, which identify priorities within a maximum of three of the six crosscutting areas of co-operation listed below. The indicative programmes are the basis for action programmes setting out the projects to be supported and the funding available. The areas of co-operation are the following:

• support for institutional. legal and administrative reform

• support to the private sector and assistance for economic development

• support to addressing the social consequences of transition

• development of infrastructure networks

• promotion of environmental protection and management of natural resources

• development of the rural economy.

Given the need to prioritise, in 2000, nearly all countries have selected from the first four areas of co-operation. For this reason, the detailed information is grouped under the first four headings. Tacis has continued to support environmental protection and to promote the development of the rural economy, but with projects that have an angle of institutional reform or private sector development. Support for environment is a particular priority in regional co-operation.

In addition, there are regional and multi-country programmes, assisting nuclear safety, networks, environment and justice and home affairs as well as cross-border co-operation, which aims at overcoming obstacles to trade and contacts as well as attacking crossboundary pollution along the borders of the EU and the candidate countries with the NIS.

The table below offers an overview of the financial figures for the year 2000

N.I.S.

COMMITMENTS PAYMENTS

Available Consumed % Available Consumed %

€ '000 € '000 € '000 € '000

Tacis 382.970 382.970 100% 398.591 398.264 100%

Cross Border 22.500 22.500 100% 21.733 21.733 100%

Baltic 5.883 5.883 100% 40.406 40.406 100%

Tacis 6.697 6.587 98% 7.722 4.808 62% Democracy

Tacis ATA* 32.400 32.400 100% 2.000 2.000 100%

Rehabilitation in 9.88 9.88 100% 4.64 3.77 81% NIS

TOTAL 450.450 450.340 100% 470.451 467.211 99%

* Technical, administrative (ATA) and support expenditure covers necessary costs

for assistance to implementation of the Tacis and Cards programmes; for

analysis, pre-feasibility and feasibility studies related to the programming of the

main budget lines; and for information collection and dissemination and public

awareness

A new phase of Tacis was launched 42 in January 2000, covering the period 2000 until

2006. This builds on the achievements and lessons of its first decade of operation and allows flexibility to respond to new developments inside the partner countries. Tacis strategy during 2000 focused on providing support to grassroots initiatives, with the greater involvement of NGOs. When designing projects, more attention was paid to involving representatives of local and regional administrations. One way to put a face on EU support delivered in the region is through partnership between members of a Tacis project group and its counterpart in the EU, for example through the City Twinning Programme. Tacis helps establish links between EU and NIS towns, bringing people together, and building lasting partnerships between local communities.

2.1. Institutional, legal and administrative reform

EU support in these regions is based on the belief that growth and stability cannot be achieved if there is no sound legal and regulatory framework or a properly functioning civil society. Reform of the relevant national institutions has therefore been at the core of

71 the European Commission’s assistance programmes to the partner countries. Most projects have focused on redrafting legislation, supporting effective policy-making, reforming public administrations, and providing support to executive and legislative bodies. However, despite the great effort already invested on aid programmes, the real progress of reform has been slower than initially hoped.

Trafficking in human beings, together with organised international crime, is becoming an increasing problem in the EU. Realising that an increasing number of crime victims and initiators have been coming from countries in Eastern Europe and Central Asia, the EU has devoted more resources to improving local justice and home affairs in those regions, including notably an allocation of €7 million under the Regional Action Programme for 2000 with the twin aims of fighting drugs and combating trafficking in human beings. New research, started in 2000, hopes to find out more about the causes of these criminal activities and identify new ways of combating them.

Most Tacis projects contain a large element of education and training. In addition, Tacis supports a specific programme, TEMPUS, which focuses on reform of the higher education sector. This fosters institution-building and promotes partnerships between higher education institutions in the EU and their counterparts in the partner countries.

2.2. Private sector and economic development

Helping private businesses has always been a top priority in the Tacis partnership programmes. The EU objectives in 2000 were to help put in place the institutions of a market economy and to stimulate business growth. A total budget of €70 million was allocated for that purpose. However, several major obstacles to enterprise development remain, notably: the current regulatory environment; the questionable quality of business practice, and inadequate access to finance. The partner countries are well aware that a stable business environment requires reforms in a number of crucial areas: government regulations – at national and local level, legal frameworks, trade and investment policies, taxation and access to finance.

The Tacis integrated approach to providing economic aid is based on the following principles.

• Develop the private sector: Bring new business skills to SMEs, use or train local

consultants and provide easier access to finance.

• Strengthen the business environment: While providing technical support, also give

policy advice to governments on macro-economics, taxation, trade and investment policy, business and regulatory improvements, and developing new opportunities for

exporters and investors.

• Promote new investment: Continue to prepare and implement EBRD investment and

loan programmes, together with Tacis-funded projects, and actively encourage inward investment.

H ELPING R USSIAN COMPANIES TO RESTRUCTURE

The Tacis Enterprise Restructuring Facility (TERF) was set up in Russia specifically to help companies and entrepreneurs develop in today’s fast-changing environment. Although the large majority of enterprises have been privatised, their restructuring has often been left incomplete, or has not even started. But restructuring is usually a crucial condition of any investment package: without it, companies cannot expect to survive in a competitive market. The uncertainty of the present economic climate means that most enterprises are unable to get project financing, even if they are ready to upgrade their operations, for example, installing new technology, improving marketing techniques, and finding strategic business partners.

TERF is there to provide selected enterprises with the advice and assistance they need while they undergo restructuring. Thus they are sure to be able to adapt successfully to the new economic environment. Companies must take the initiative to ask TERF for assistance, and are expected to commit some funds of their own to the process. In TERF I the average contribution to project costs was 12%, and in TERF II, it is now 20%.

TERF is designed to respond to the sudden and unexpected shifts in Russia’s business environment. It is also sensitive to differing client requirements, and works closely with the senior management of the enterprise in question. For TERF to succeed, company management must commit to it and allow access to commercially sensitive information. However, many enterprises are reluctant to hand this information over to consultants. So, it can take three months – or even longer – to gain their confidence so that they can get help from TERF.

Food and agriculture

During 2000, work continued on 45 projects, including some from previous Action programmes, and some new projects were started, a few of which were completed during the year. The total budget came to around € 75 million.

• To improve the situation of family farming in Russia, two projects helped private

farmers to set up new co-operatives, either for agricultural production and processing, or for providing rural credit.

• Several agricultural projects were completed in Ukraine and Moldova. These covered

the production, processing and marketing of food and crops in post-privatisation conditions. Help was also given with agricultural education and consumer policy, and new projects for research. Projects dealing with food trade matters and the

development of co-operatives are still going on.

• Livestock improvement projects were funded by the EU in Kazakhstan and Central

Asia, and the meat and milk sectors were assisted in Turkmenistan and Kyrgyzstan. The EU supported the integrated development of agriculture and food processing

industries in Uzbekistan.

In the region as a whole, additional EU help was provided to strengthen the institutional framework on issues such as land registration, rural credit services, marketing of agricultural products, and agricultural monitoring.

INVAS – EU RESPONSE TO 1998 FINANCIAL CRISIS IN R USSIA

The financial crisis of 1998 brought all stock market activities in Russia to a standstill. It also put a large number of listed stock market companies out of business. Capital Market Investment Advisory Services (INVAS) was started in October 1998 with the ambitious mandate to restore confidence to the Russian capital market and to increase the professionalism of market participants. It was also supposed to form international partnerships and establish links to international organisations. During the three years that followed, Tacis provided support of €4.5 million and more than 32 Russian companies received tailor-made consultancy from the INVAS team. Throughout the project, an international team of up to 140 experts advised their Russian counterparts in Moscow and in the regions of Samara, Rostov-on-Don, Nizhny Novgorod, Ekaterinburg and Vladivostok.

Through the Tacis INVAS project, the EC helped bring about the revival of the Russian financial markets. The INVAS achievements were leveraged by initiatives to increase shareholder protection and introduce best practice for corporate governance. The project was also the first Tacis project to succeed in passing an ISO audit. The INVAS Project Quality Management System complies fully with ISO 9002, the international standard for best practice.

2.3. The social consequences of transition

The transition process has caused far more social hardship than had been anticipated. Poverty throughout the region has dramatically increased, and all social indicators are deteriorating. This area of EU co-operation has become crucial. Most EU projects in this area focus on the reform of primary and preventive health care. They also include measures to support employment and retraining. Two examples of particular interest are highlighted below.

Health and safety in the workplace in Ukraine

Tacis is advising the Government of Ukraine on matters of occupational health and safety. The main results are a marked improvement in industrial working conditions, and the introduction of insurance cover for accidents and occupational diseases. For the first time in the Ukraine, people realised that improved safety in the workplace, together with decent working conditions, could lead to a rise in productivity. As a result, two new laws were drafted. One will set up a new State Inspectorate to supervise safety and occupational health throughout the country. The other is a new law on the safety of industrial products.

Preventive health care in Uzbekistan

A thousand people — public health professionals and members of the general public — were trained in preventive health care under a project from the 1998 EU Action Programme for Uzbekistan. Policy advice was also given to the Ministry of Health. Local NGOs were actively involved in public awareness campaigns on health-related issues. All this was done for €1 million.

Some of the project trainers adapted these awareness campaigns for use in schools. The messages focused on preventing heart disease , sexually transmitted diseases (STD) and drug addiction. Leaflets were distributed and a local NGO helped produce a video on drug addiction to be shown on national TV. Other TV spots will follow.

2.4. Development of infrastructure networks and environment

Energy policy

A total of 40 projects were implemented during 2000 for a total budget in the order of €85 million, including the following.

• Russia: Five out of 18 projects in the energy sector (€34.5 million) were completed

during the year. All projects included energy-saving measures to limit the impact of energy use on the environment. Where municipalities and companies with cash budgets found themselves able - thanks to EU aid - to make loan repayments, improvements in the space heating sector could be seen immediately. In Moscow, starting up new district heat and solid waste collection services brought additional benefits, leading to a new regulatory framework for a service-oriented organisation; Moscow now has a municipal administration able to respond changes in external

demand.

• Azerbaijan: Raising the standard of operating methods in the Baku Machine Building

Plant to international (API) level, together with proper training of the plant personnel. This project also led to the testing of local technologies to clean up oil-contaminated soils, and to the setting up of a specialised laboratory to analyse oil-contaminated soil and water samples. One final spin-off was that it helped establish a new Ministry of

Fuel and Energy.

• Uzbekistan: Pilot project to introduce heat measuring systems for the domestic

heating sector, to help provide a system properly adapted to the needs of the

Khokimyat people of Tashkent. A Ministry of Communal Services was also set up.

Environment

Environmental protection has to be integrated in Tacis projects in order to ensure that the new economic and institutional reforms inside the NIS are truly sustainable in the long term. Fourteen projects were implemented in 2000 at a total budget of around €30.5 million.

• Russia: The clean-up of pollution from two former chemical weapon plants at Saratov

and Dzherzinsk (€7.8 million in total) started in 2000. A third clean-up project is planned. Two other Tacis projects dealt with water management (€ 2.5 million) and industrial accident prevention (€3 million) . A new €2.5 million project to introduce environmental monitoring systems into Russia was started in 2000 under the aegis of the Ministry of Natural Resources. There are also plans to harmonise environmental

legislation at federal level.

• Ukraine: The State Environmental Inspectorate is being reinforced (€1 million), and

regional capacity for industrial waste treatment and management in Ukraine is being strengthened (€1.5 million). Another project is providing water and waste water management and operational support to the town of Miriupil (€1 million). All three

projects were operating successfully in 2000.

2.5. Nuclear safety

The Chernobyl disaster in 1986 raised world-wide concern about using Soviet-designed reactors. Since then, the international community has invested a lot of time and money to avoid such a disaster happening again. The G7 countries adopted a nuclear safety strategy, of which the first step was to classify all Soviet-designed reactors according to the feasibility of upgrading them to acceptable international safety standards. All reactors that could not be upgraded were to be decommissioned, while the rest had to be brought up to acceptable standards. The costs involved are immense. The international community has the capacity to pledge help, get upgrading projects going and transfer know-how and technical information to the plant personnel. However, it will never be able to afford to pay for the whole upgrading process.

In September 2000, the European Commission spelled out what it could offer to nuclear safety in the NIS under Tacis in a Communication ( 43 ) to the EU Council and Parliament. The European Commission also contributed €90 million to the Chernobyl Shelter Fund (see box).

Operating the Chernobyl plant was highly risky, yet without Chernobyl, Ukraine was desperately short of electrical power supplies. In November 2000, the Commission pledged €65 million to help Ukraine buy electricity during the interim period (2000 — 2003) while new power plants were being built. In the same month, EU Member States approved a new Tacis project to fund a Fuel Gap Programme.

C HERNOBYL S HELTER F UND (CSF)

In the aftermath of the Chernobyl accident, the containment system, constructed quickly to prevent the radiation from spreading widely, worked relatively well. Since then, some failures have become apparent. The cost of building a permanent shelter that will reduce the risk of pollution while meeting all safe containment standards was estimated in 1998 as €768 million. Unable to raise such funding within the short time available, Ukraine asked for international help. Two international pledging conferences have together raised nearly all the funding needed. The pledges collected by the Chernobyl Shelter Fund (CSF) are channelled to the EBRD, which manages the fund. The various donors, united in an Assembly of Contributors, monitor the implementation of the CSF and give guidance on the use of the funding. The European Commission has already contributed € 90 million in two instalments during 2000 to build up a new safe sarcophagus around the damaged reactor

U KRAINE ’ S F UEL G AP

€ 25 million from Tacis funds was set aside in November 2000 to fund the immediate generation of electricity after Chernobyl closed in December. Very soon, the Commission had already arranged for two Ukrainian power generating plants to be supplied with 374 million m³ of natural gas. With this gas, 28% of Chernobyl’s average yearly electricity output could be generated, the equivalent of 8% of Ukraine’s electricity output per year. Delivery of the gas was supervised by both EU and Ukrainian Government representatives, backed by independent monitoring to ensure full transparency and accountability. Phase 2 is now being planned to reduce the fuel gap still further.

The EC and the Ukrainian Government agreed to use the proceeds from selling this new electricity for reform and strengthening of the Ukrainian power sector directly subsidising the most vulnerable parts of Ukraine’s population (pensioners, disabled people, low-income families) and cutting down the outstanding electricity bills of public institutions (hospitals, educational establishments, orphanages, retirement homes). The newly cash-rich utilities can afford to take steps to start restructuring and prepare for future privatisation.

2.6. Regional issues

Traceca

43 COM(2000) 493 i FINAL. September 6 th 2000

Traceca is the part of the 2000-2003 Tacis Regional Programme that deals with a transport corridor from Europe through the Caucasus to Asia.

In 2000 a Traceca Multilateral Agreement was ratified by the national parliaments of 12 signatory states (Armenia, Azerbaijan, Bulgaria, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Romania, Tajikistan, Turkey, Ukraine, Uzbekistan). In March their transport ministers agreed to endorse a concrete action plan for 2000-2001 with a budget of €11.5 million to cover five projects.

In February 2001 a Permanent Traceca Secretariat opened in Baku (Azerbaijan) to coordinate activities and liaise with transport officials in the signatory states. A ministerlevel Intergovernmental Commission decides on programmes and funding in liaison with the European Commission.

During 2000, work continued on six other projects from the 1999 Interstate Programme in the southern NIS, for a budget totalling 25 million. These projects focused on the implementation of the Traceca Multilateral Agreement and on infrastructure improvements.

Current Traceca projects in the NIS

• Caucasus: Installation of 1 300 km of optical cable running through Armenia,

Azerbaijan and Georgia, together with a digital transmission backbone, providing updated railway track signalling and communications between 133 rail stations at a cost of €15 million. The reconstruction of the main road linking the three capitals, Tbilisi, Yerevan and Baku, is being examined; there is potential for attracting new

investment in the order of €150 million from the World Bank and EBRD.

• Central Asia: Rehabilitation of the rail-ferry terminal in Aktau port (Kazakhstan) is in

progress, which will allow the shipment of wagons between Azerbaijan and Kazakhstan, and create a new maritime route from the Caspian Sea.

• The five Central Asian republics: A new project to improve customs facilities at

border crossings has been started, including computerisation to comply with international standards. Tacis will not only supply the equipment but also train the

customs staff.

Gas exports and INOGATE

The Interstate Oil and Gas Transmission to Europe (INOGATE) programme has become a broad-based instrument of EU strategy for the security of energy supplies. It is a multiregional programme that promotes the overall integration of a network transporting oil and gas to Europe, and opens up EU access to new sources in Russia, the Caspian Basin, the Middle East and the Mediterranean.

In a few cases, INOGATE has definitely made a difference: not only has it led to trade agreements, but it has also opened new dialogue contributing to the peace and stability of the region of operation. For example:

• The INOGATE Umbrella Agreement was instrumental in establishing a Memorandum

of Understanding between Greece and Turkey to cover the gas connection.

• In the Balkans, INOGATE helped to establish a real working co-operation for the oil

pipeline of Constanza-Belgrade-Trieste.

• The INOGATE Kiev Antenna office, officially inaugurated on November 2000 by EC

President Prodi and Prime Minister Yushchenko of Ukraine, is now fully operational. This is an important step in the development of the INOGATE Programme.

INOGATE received €15 million funding in 2000 to support its priority investments on the technical level in the three regions of Eastern Europe, Caucasus and Central Asia.

• Four gas fiscal metering stations are being built in Ukraine, Moldova, Georgia and

Armenia in order to improve their gas trade and commercial relations.

• Construction has also started on two gas metering stations on Azerbaijan’s borders

with Georgia and Russia, with the aim of calculating more accurately the export and import of natural gas between these countries and Russia.

Telecommunications

There is still some way to go to convert the telecom sector in the NIS from internal statecontrolled systems to free market systems covering traditional voice telephony, digital communication and information systems. EU help is needed to create an adequate regulatory framework and to build up the necessary e-certification capacity. In 2000, €11.5 million was spent on seven projects in total, including:

• Uzbekistan is preparing the way for the potential privatisation of its telecom sector,

including the drafting of appropriate legislation for market liberalisation. Four other projects have been supporting the improvement of testing and certification facilities

for telecom and space equipment.

• The Russian State Library is being helped to digitise its catalogues for publication on

the internet, while the ground is being prepared for an electronic library.

2.7. Cross-border co-operation (CBC)

Environment

In 2000, Tacis support for environment on the EU/candidate countries was substantial: implementation was on-going in 14 projects, totalling € 35 million. The main emphasis was on water resource management and the control of water quality. Tacis provided support to most of the major waterways in the border region, including work on the Paz, Prut, Bug and Danube rivers. This includes the improvement of monitoring capacity, introduction of guidelines and regulations for water quality control, and setting down what infrastructure is necessary.

In addition, two projects in Karelia concentrated on the development of eco-tourism. The management of the Karelia National Parks was strengthened and new improved infrastructure is being built.

Border crossings

Some existing border crossings permit only bilateral traffic. The EU is opening up new international border crossings to encourage more trade (see table). This is no mean undertaking. Some crossing points are huge. One example is Salla, where just the administrative–operational building set up for customs and border controls of cars, buses and lorries covers an area of 1 020 m². There are also canopies covering control booths for all lanes, a building for detailed vehicle inspection with storage area of 450 m², not to mention truck weighing posts, dog kennels and a fully secure perimeter fence with controlled entry and exit points.

2.8. Horizontal policies

European Initiative for Democracy and Human Rights

Implementing human rights, protecting minorities, developing of civil society organisations and introducing the basic infrastructures of public and democratic life are among the objectives which have been set with a view to promoting democracy in these parts of the world. The priorities of the 2000 budget heading, which has received € 6 700 000 of commitment appropriations, are ambitious, covering education and sensitisation in human rights, the training of armed forces, lawyers and judicial authorities, supporting the development of local government and independent media and the promotion and development of programmes undertaken jointly with international organisations.

Justice and prisons in the Northern Caucasus

A joint Commission-Council of Europe programme, with a budget of some € 500 000, is examining the judicial and prison situation in the Northern Caucasus region of the Russian Federation, in the light of the crisis affecting the Republic of Chechnya. One objective is to consolidate the independence of the judiciary, to improve its effectiveness and to impart a sense of responsibility to those involved in criminal investigations, such as public prosecutors and the police. At the prison level, the task is to make personnel aware of the rule of law and basic rights, and at the same time to improve the conditions of detainees, in particular the most vulnerable.

Elections in Belarus

A sum of € 413 000 has been granted to the Helsinki Belarus Committee, in co-operation with OSCE-AMG in Minsk, to set up a public monitoring system for the October 2000 parliamentary elections and the September 2001 presidential elections

Rehabilitation

The countries benefiting from aid (€ 9.9 million) are above all Georgia and Azerbaijan, with major projects also in the Nagorno-Karabakh enclave and in Tadjikistan. Most projects are for restoring infrastructures in regions devastated by recent conflicts, by means of financing conventions with the governments concerned.

Food Safety

2000 was a turning-point in the food security programmes for the NEIs. More countries benefited (Armenia, Azerbaijan, Georgia, Kyrgyzstan, Tajikistan, Moldavia,). The Community aid, in most cases, involves budget support targeting reform in the farming sector. Since 2000, this support has been progressively extended to the social sector, in order to aid reform, to revive the farming sector and to boost the incomes of vulnerable families.

In Kyrgyzstan, for example, budget support of € 10 million and technical assistance are contributing to the development of the farming and social sectors: support for the land survey authorities (security of real estate tenure), restructuring the policy and financial management departments of the Ministries of Agriculture and of Social Protection, and rationalisation of the social security system to the benefit of the poorest groups. These programmes will supported by technical assistance within the two ministries concerned.

In Moldavia, the deterioration of the macro-economic picture, the climatic conditions and the slowing down of the structural reforms have led to the decline of living conditions and the generalisation of poverty, particularly in the countryside. Food balance has become very fragile, because of the climatic upheavals and also the economic problems. Budget support and technical assistance amounting to € 5.5 million have supplemented projects conducted by the ECHO and the TACIS programme. Apart from support for the balance of payments, this EC intervention focuses on public expenditure in the farming and social sectors, which it considers to be a priority. The EC’s action is supporting, in particular, the process of liberalisation in the farming sector, the rehabilitation of national irrigation networks and the paying of social security benefits, to be guaranteed as a priority to the most vulnerable groups.

Humanitarian Aid

The European Community Humanitarian Office (ECHO) has been active in the region. In the table below ECHO’s financial decisions can be found, split by groups of countries.

FINANCIAL DECISIONS FOR HUMANITARIAN AID IN 2000 (ECHO)

EASTERN EUROPE/NIS DECISIONS IN € Million.

TOTAL 48.930

• Belarus, Moldavia, Ukraine 2.800

• Mongolia 1.875

• Russian Federation

– Northern Caucasus 23.200

– Other 1.200

• Southern Caucasus

– Armenia, Azerbaijan, Georgia 4.855

15.000

• Tajikistan

2.9. Conclusions and perspectives

The Tacis programme, covering the countries of Eastern Europe and Central Asia, is now a well-established programme with an annual commitment budget of around €450 million. It is adapting to the evolving needs of the region, including recognition of the growing differentiation between the countries. Enlargement of the EU to the east is leading to a shift of focus towards the Western NIS in terms for example of border management, spill-over environmental concerns and cross-border initiatives. Greater attention will be paid to promoting investments, including the co-financing of investment projects with international financial institutions. Investment support will also be extended to the social sectors, where the needs are huge after a decade of very sharp economic decline. At the same time, the overall focus on promotion of reforms is being strengthened. More prominence will be given to providing high-level policy advice, and to other activities in connection with the implementation of the Partnership and Cooperation Agreements but also to long-term institution building, in particular in support of the rule of law. As devolution continues, more and more assistance will be delivered through the local Commission's Delegations.

V South Mediterranean,Near and Middle East

The Euro-Mediterranean Partnership is the most comprehensive and ambitious relationship established so far between the European Union and the countries and territories of the South Mediterranean, Near and Middle East. Launched at the Barcelona Conference in 1995, it is intended to be a political, economic and social partnership of equals, which goes deeper than pure development co-operation.

In the Middle East, the EU also has ties with the Gulf Cooperation Council and its six member states, together with Yemen and Iran.

E UROMED

PARTNERSHIP

The Barcelona Declaration adopted by the 15 Member States and COUNTRIES :

its 12 Mediterranean Partners on 27-28 November 1995 constitutes EU the basis of Euro-Mediterranean co-operation. The Euro

Mediterranean Partnership activities consist of bilateral and Algeria

regional tracks. These activities are mainly funded by the MEDA Cyprus *

Programme 44 . Egypt

Bilateral co-operation is based on the Euro-Mediterranean Israel

Association Agreements. Regional co-operation is based on regular Jordan

co-ordination meetings and conferences held at the highest level as

the Euro-Mediterranean Foreign Ministers Conferences (Lisbon Lebanon

2000, Marseille 2000). Malta *

Morocco

Palestinian Authority

Syria

Tunisia

Turkey *

• * 

  Originally EuroMed countries, at present EU candidate

countries

44 Based on the Council Regulation (N° EC/1488/96) on financial and technical measures to

accompany the reform of economic and social structures in the framework of the Euro Mediterranean partnership (MEDA) adopted on 23 July 1996 and amended on 27 November 2000

by the Council Regulation (N° EC/2698/2000) which is usually called MEDA II.

Euro-Mediterranean Association Agreements

Highlights of 2000

Agreement already in force Tunisia, the Palestine Authority (*)

Agreement coming into force Israel, Morocco

Ratification pending Jordan (**), Egypt (***)

Negotiations resumed Algeria, Lebanon, Syria

(*) Interim Agreement

(**) The AA with Jordan has been ratified by 14 out of 15 EU member States

(***) The AA with Egypt has been signed on 26 June 2001

1. K EY FIGURES IN 2000

In 2000, the funds committed to Euro-Mediterranean partnership activities amounted € 1.002 million and the total payments reached € 472.2 million. Most of the part of these funds were committed within the framework of the MEDA Programme (€ 879.2 million in 2000). The remaining funds were committed on others specific budget lines like Peace process, Democracy, and Palestinian refugees (€ 122.8 million in 2000).

MEDA commitments in 2000: € 879.2 million

Bilateral co-operation: € 719.4 million

Regional co-operation *: € 159.8 million

MEDA payments in 2000: € 330.5 million (243 in 1999)

Countries eligible for MEDA funding:

Bilateral: Algeria, Egypt, Lebanon, Jordan, Morocco, Syria, Tunisia, Turkey, Palestinian Authority.

Regional funds/cultural activities only: Israel, Cyprus and Malta. (Limited because of their high per capita GDP)

Other budget lines in 2000 (Peace process, Democracy, Palestinian refugiees..):

Commitments: € 122.8 million

Payments: € 141.7 million

Total commitments in 2000: € 1.002 million

Total payments in 2000: € 472.2 million

• * 

  (including ‘Global allocation’ and ‘Technical assistance’)

2. K EY OBJECTIVES

The three initial objectives of the Euro-Mediterranean Partnership as defined at the Barcelona Conference of 1995 are :

• 1. 

  The creation of a common Euro-Mediterranean area of peace and stability based on fundamental principles of human rights and democracy ;

• 2. 

  The creation of an area of shared prosperity through the progressive establishment of a free trade area between the EU and its Mediterranean partners and among the Mediterranean partners themselves, together with substantial EU financial support to cover both economic and social transitions ;

• 3. 

  To develop human resources, promote mutual understanding among the peoples in the Euro-Mediterranean region and to develop free and flourishing civil societies.

Much has been done since Barcelona to achieve these objectives but it still appears necessary to improve the fulfilment of the Barcelona objectives. The new Communication from the European Commission 45 « Reinvigorating the Barcelona Process » provided the main input for the Euro-Mediterranean Foreign Ministers meeting held in Marseilles in November 2000 where a number of concrete proposals were agreed:

• The negotiation, signature and ratification of the Association Agreements which

constitute the framework of the political dialogue and economic co-operation should be speeded up. The Association Agreement with Egypt was signed in 2000 but

negotiations with Algeria, Lebanon and Syria did not make satisfactory progress.

• The financial impact of the MEDA programme should be improved, notably by

subordinating future financial aid to the pursuit by partners of economic transition reform. Similarly, more efforts should be made to substantially reinforce regional

economic dialogue.

• A greater reciprocal liberalisation of trade will have to be reached – notably in

agriculture - by the end of the transitional period, in accordance with applicable GATT and WTO provisions.

• The Euro-Mediterranean Charter for peace and stability could not be adopted due to

the Middle East crisis. Nevertheless, significant progress was made towards agreement on this instrument which will promote respect for fundamental principles of human rights and democracy and facilitate conflict prevention and crisis

management.

• A new programme « Information and communication » will be launched and a "Euro

Mediterranean partnership" label will be introduced in order to promote Euro-Med cooperation projects.

84 3. G ENERAL POLITICAL AND ECONOMIC CONTEXT IN 2000

The year 2000 was dominated by the instability of the Middle East region due to the negative consequences of the outbreak of violence resulting from the Palestinian-Israeli conflict. The interruption of the Middle East Peace Process has seriously jeopardized the benefits of the Barcelona process in this region and imposed limits on the development of overall regional co-operation. However, one of the achievements of the Marseille Conference in November 2000 (held two months after the beginning of the second Intifada) was precisely to demonstrate the resilience of the Barcelona process. In spite of this dramatic context, the European Union was able to pursue a frank political dialogue and to take emergency measures of which the most important was the setting up of a special cash facility of € 90 million to help the Palestinian Authority preserve its institutional framework.

The economic highlight of the year 2000 was the further rise in oil prices, which had already started rising in the first quarter of 1999. The average price of oil per barrel in 2000 was $29, about 50% higher than in 1999. As a result, terms of trade for the region’s oil-producing countries improved considerably, and growth was boosted, particularly for net energy-exporting countries such as Algeria, Egypt and Syria.

4. R EMAINING STRUCTURAL PROBLEMS

• The lack of spirit of partnership did not lead to a sufficiently frank and serious

dialogue on crucial questions concerning universal human rights, prevention of terrorism or migration.

• Certain Mediterranean partners are not sufficiently committed to speeding up the

economic transition process and to introduce the necessary national reforms to comply

with the Association Agreements.

• The volume of the exchanges between the Mediterranean partners (South-south trade),

originally very weak, did not increase. Moreover, the investment level of the EU in the region remains low compared to investment flows in other parts of the world. Part of the problem lies in the diversity of regulations, the inadequacy of the physical and administrative infrastructure and the lack of economic and legal transparency in

commercial activity.

• The implementation of the MEDA programme was hindered by the complexity of the

procedures. In spite of the priority given to the structural and sectoral adjustment in order to help the governments achieve economic and social reform, difficulties were

frequently encountered in the implementation of the Association agreements.

• Civil society is not sufficiently aware of the importance of the Barcelona process and

too often is not aware of the opportunities and advantages it offers.

5. T HE MEDA P ROGRAMME

Most activities undertaken within the framework of the Euromed Partnership are financed by the Union’s MEDA programme which covers bilateral and regional cooperation. Most MEDA funds are channelled bilaterally to individual countries through co-operation programmes (see box above). The rest is allocated to multilateral regional co-operation activities, involving all 27 partners.

From MEDA I to MEDA II

The MEDA programme provides financial support to the Union’s Mediterranean policy as defined in the Barcelona declaration. Since 1995, efforts have concentrated on two aspects : promoting the transition towards an open economy and helping partners meet the attendant socio-political challenges, in line with the objectives of the association agreements. The actions that MEDA supports seek in particular to maintain the essential balance between economic growth and social stability. Constant attention to the human element, together with partner countries’ determination to successfully carry through essential national reforms, are in fact the cornerstone of Euro-Mediterranean dialogue.

Between 1995 and 1999, the 12 Mediterranean partners have benefited from over € 4.4 billion of aid from the EU, € 3.4 billion of it under the MEDA I programme. For its part the European Investment Bank has made available € 4.8 billion of loans during this period.

The MEDA programme presents a satisfactory performance in terms of commitments (€ 879.2 million in 2000). The disbursement rate has moved up substantially, from 26% of commitments in 1995-1999 to 37.6% in 2000 (€ 330.5 million disbursed in 2000). The lower payment levels of the earlier years are explained in part by the usual slowness of the early years of the programme, but incisive structural adjustments – which have begun to bear fruit – have also proved necessary in order to optimise its performance. This, the Commission concluded, called for better programming and implementation of the aid in order to improve its strategic value, to target it more precisely and thereby increase its impact and visibility at the local level.

The newly-adopted MEDA II programme (2000-2006 with a budget envelope of € 5.35 billion) aims to improve implementation of the reform programmes and projects aimed at providing a better response to beneficiary populations’ expectations.

T HE THREE MAIN DIRECTIONS OF MEDA II

Streamlining the decision-making process should lead to more efficient programming, based on multi-annual strategy documents (2000-2006), at national and local levels. Three-year National Indicative Programmes (NIPs) and Regional Indicative Programmes (RIPs) will be based on these strategy documents. Annual financing plans will be adopted and implemented at national and regional levels.

Enhancing capacities for programming and implementing the planned actions, in particular through greater dialogue with Mediterranean partners on medium-term MEDA programming and better integration of their individual reform strategies.

More efficient implementation procedures with the reform of the Commission’s external aid and the services managing it.

Emphasis will in future be on a small number of strategic programmes. Financing will not be available for small-scale or isolated projects outside the programme priorities. The Commission is also determined to reduce the time taken to get MEDA projects operational by targeting them better, financing only mature projects and limiting the too frequent practice of extending project periods. Finally, in order to improve the impact of programmes, financing will be linked more strictly to progress achieved in implementing the association agreements. In this way, programmes will in future be directed more at a smaller number of priorities, directly linked to the agreements, and will take greater account of partners’ desire to demonstrate, by their actions, their determination to promote regional trade and economic co-operation and to take the necessary economic reform measures, in particular in the financial sector, in order to successfully complete the economic and political transition process.

6. B ILATERAL CO - OPERATION PRIORITIES

In its communication on « Reinvigorating the Barcelona process » adopted in 2000, the Commission recalled that the implementation of the Euro-Mediterranean Partnership is based on the negotiation of bilateral association agreements with each Mediterranean partner. The overall objective remains that of establishing a Euro-Mediterranean free trade system in 2010, establishing permanent and durable political dialogue and implementing various forms of co-operation between each Mediterranean partner and the EU.

The outcomes of the Marseille conference in November 2000 underlined the objectives of the Association Agreements as defined in the Barcelona declaration:

• Support economic transition by developing the private sector to prepare the way for

free trade and improved competitiveness;

• Strengthen the socio-economic balance by improving health, education, environment

and rural development to ease the way through economic transition and structural adjustment;

• Promote human rights, the rule of law and democracy.

The conference also stressed the following priorities for the future :

• To speed up the pending negotiations with Algeria, Lebanon and Syria and to

accelerate the procedure of ratification by the Member states in the future, notably by obtaining assurance that the Association Agreements will be ratified within two years

of being signed ;

• To reach an agreement with the Mediterranean partners in order to allow wider access

of their agricultural products to the European market. This objective complies with the WTO requirements and the adjustment of transition period criteria ;

• To intensify South-South trade by encouraging commercial and economic cooperation

at regional and sub-regional levels ;

• To define an appropriate regulatory framework for the future Euro-Mediterranean free

trade zone by reinforcing co-operation in numerous fields such as customs and tax systems, financial services, competition and intellectual property.

Moreover, the Commission Communication « Reinvigorating the Barcelona Process » recommended that Mediterranean partners should adopt a series of concrete measures which should be implemented within a strict timescale:

• Those Partners who are not yet members of the WTO should become members by the

end of 2002;

• A free trade agreement should be signed among the partners who have concluded an

Association Agreement within five years of its conclusion with the EU.

7. B ILATERAL C O - OPERATION ACTIVITIES IN 2000

While the establishment of the new guidelines and priorities detailed above has been a very important task during 2000, running projects have continued developing. The main activities in the different countries of the region are summarised hereafter.

Algeria

Following a six-year break (1994-2000) due to the domestic situation, negotiations for an association agreement between the EU and Algeria resumed on 14 April 2000. During the period 1996-1999, projects were committed for a total amount of € 164 million within the framework of the MEDA Programme. These programmes mainly aimed at developing the private sector and to the structural adjustment. In addition, a risk capital operation managed by the EIB were funded with the remains of the financial protocols. In 2000, the resumption of relations with the Union has allowed three projects totalling € 30 million to be launched: Support for telecommunications and postal services reforms and developing the information society (€ 17 million); Support for Algerian journalists and media (€ 5 million); Support for police service modernisation (€ 8 million).

A financing agreement has also been signed for updating the financial sector (€ 23 million).

Egypt

The conclusion of the Association Agreement should have led directly to the initiation and signing stages during 2000. Eventually, the Agreement was initialled on 26 January 2001. Meanwhile, € 12.7 million were committed under the MEDA programme.

Apart from interest rate subsidies to EIB loans (€ 100 million), there was a considerable run-over of existing commitments made under MEDA I (€ 615 million for the Social Fund, for basic health and education, and industrial modernisation). The European Commission took a lead role in the multi-donor review of Phase II of the Social Fund for Development programme.

The slow rate of progress on programmes already approved gave rise to concern. The Industrial Modernisation Programme (€ 250 million) had been blocked because the planned organisational structure – the Industrial Modernisation Council – had not been set up. This needed a Presidential Decree, which was issued at the end of 2000. However, the technical assistance made available through the EU finally began to make a real impact in health (€ 120 million) and education (€ 100 million) by improving both, access to and quality of primary health care services and well as the improvement of basic education sector.

In other areas, achievements were recorded in the programme for developing the private sector and also in several programmes focused on environmental protection (see box below).

ACHIEVEMENTS OF EGYPT’S PROGRAMME FOR THE PRIVATE SECTOR

A significant number of new jobs in Egypt have been created, thanks to the EC-funded Private Sector Development Programme (PSDP). Set up with €25 million in 1996, the PSDP provides tailored and integrated programmes of technical expertise to private sector companies and business associations. Services are provided in response to demand, and most activities apply the principle of cost sharing.

The PSDP was refunded in 1999 (€ 20 million) and will cease operations in December 2001.

Business upgrading: This has turned out to be the flagship service, well known in the local Egyptian market.

Business training: More than 125 different types of course are on offer at the European Management Centre, which has trained some 4 000 executives.

Marketing and export: Advice has been given to over 180 companies producing a wide range of consumer goods.

Business co-operation: More than 100 companies have been helped to form strategic alliances with European companies.

Information services: This division provides commercial data and market information, and acts as a reference point for other donor programmes. Nine business associations have received direct help from the Institutional development division.

. ACHIEVEMENTS OF EGYPT’S NATURAL PROTECTORATES PROGRAMMES

Egypt has huge tourist potential and is rich in important environmental and historical sites. However, the exploitation of these ecologically fragile areas requires comprehensive knowledge of the principles of sustainable development. The three important EC programmes described below aim to meet this requirement.

The Saint Katherine Protectorate Development Project – a unique model of successful co-operation between the Government of Egypt and the European Union in the field of environmental, cultural and religious preservation. Declared a national protectorate in 1996 (with €6 million from the European Commission), it covers 4 350

km 2 – virtually the entire high mountain massif of South Sinai – and is one of the most

visually spectacular and ecologically unique areas in the Middle East. The project managers believe that local people, tourists and native biodiversity can all coexist. They also believe that the Bedouin people are the best stewards of the protectorate’s natural resources, on which they depend.

The Gulf of Aqaba Protectorates Development Programme aims to safeguard the natural resources of coastal areas to promote a controlled local tourist industry. Set up in 1996 with an EC grant of €10 million, this project reinforces the activities of the Egyptian Environmental Affairs Agency’s Natural Protectorate Sector, which forms part of the economic development of South Sinai.

The Oil Pollution Combating Emergency Centre is located at the entrance of the Gulf of Aqaba. This project consisted of setting up and equipping an emergency response centre, including training its staff in necessary procedures and mechanisms to combat oil pollution at the mouth of the gulf, which is an area particularly vulnerable to oil spills.

Jordan

The performance of Jordan under MEDA (1995-99) has been exemplary. As a result, Jordan has received the largest per capita amount of MEDA grant support of all the Mediterranean Partners.

Targeting its actions on the basic needs of the population, the Union has concentrated its technical assistance on to the Project Management unit responsible for the multilaterally funded USD 250 million rehabilitation of the Amman water supply system (€ 5 million), and on modernising Jordan’s industry, to help create thousands of new jobs and boost the national economy. The Commission also approved a number of cultural events to pay tribute to the legacy of the late King Hussein.

New programmes were launched in 2000 to develop the tourism sector and the preservation of cultural heritage (€ 3.9 million). Full use was made of the €80 million Structural Adjustment Facility since all performance criteria had been fulfilled. The Commission decided to grant an additional € 15 million to back a new EIB-managed risk capital operation for financial intermediaries working on equity/quasi equity investment.

Lebanon

In September 2000, the Commission and the Lebanese government ended a two-year interruption of negotiations towards a Euro-Mediterranean Association Agreement. This interruption was due to internal political reasons, notably the organisation of general elections and the reluctance of the Lebanese authorities to abolish private sector protectionism and the will to preserve the existing fiscal system.

Between 1996 and 1999, Lebanon benefited from € 182 million in MEDA grants.

No new commitments were undertaken for Lebanon in 2000 under the MEDA programme. The signature of three new financing agreements took place in 2001: Industrial Modernisation (€11 million), Structural Adjustment Facility (€50 million), and Fund for Social and Economic Development (€25 million). The first tranche of the Facility (€30 million) was paid in 2000.

Outside the MEDA programme, in the aftermath of Israeli withdrawal from South Lebanon in May 2000, the EU brought in 12 ECHO humanitarian assistance projects (€ 3.9 million) and five rehabilitation projects (€ 9.2 million). A high proportion (about € 10 million) of this was dedicated to South Lebanon, and the balance was mainly to assist Palestinian refugees in the 12 settlement camps inside the Lebanese border.

ECONOMIC RECOVERY OF DISPLACED PEOPLE

IN THE SOUTH MOUNT-LEBANON REGION

Since the end of hostilities, the Lebanese government has been trying to encourage its displaced citizens to return home and reintegrate with the resident population. An Italian NGO, the Istituto per la Cooperazione Universitaria (ICU), has been managing the project, working with the Lebanese Ministry of the Displaced, the Agricultural Ministry and other national and Italian institutions. Destroyed infrastructure has been rebuilt, new jobs created and small and medium-size enterprises supported. In 1995, the EU started supporting this project with a grant of € 6.3 million.

Principal achievements

The facilities at Kfar Fakoud have revived old friendships and created new intracommunal contacts. A pilot demonstration farm and service centre has been set up at Kfar Fakoud, Deir el Kamar, to provide technical assistance and training to farmers. This project has contributed to create economic opportunities and stable conditions for the people working in agriculture, which is by far the dominant activity in the region.

Training : Nearly 3 500 farmers were trained, either on the project farm or in neighbouring villages. Some engineers have also been trained in Lebanon and in Europe, and the practical guides and educational leaflets produced for local farmers have been distributed throughout Lebanon.

Credits : Thanks to this project, farmers may now individually request an agricultural credit up to € 20 000 with a subsidised interest rate of 3%, reimbursable over a period of three and a half years. These mini-credits are managed by Italy’s Banca di Roma. So far, 100 projects have been approved and 94 loans given, at a reimbursement rate of 91%.

Subsidies: These have been widely used in the fruit and olive tree sector by farmers buying plant stocks and municipalities buying plant health products. In December 2000, the region’s olive producers were able to obtain new subsidies of up to € 10 000 to buy kits to analyse olive oil acidity and other equipment to modernise their olive presses, and so improve the quality of their output.

Morocco

Morocco has clearly expressed its desire to strengthen economic ties with the Union. The Association Agreement with the EU, that came into force on 1 March 2000, marks a decisive step towards introducing a free trade zone.

€ 796.6 million were allotted to Morocco between 1995 and 1999. In 2000 alone, € 140.6 million were committed to different projects aimed, in particular, at improving living conditions (health, urban development, environment, etc.) Examples include:

The management of solid household waste at Essaouira (€ 1.9 million). This programme seeks to reduce the impact of this waste on the environment and to develop the city’s local waste processing capacities.

Modernisation of the court system (€ 27.6 million). This project aims at improving the quality of the judicial system and to make it more efficient.

Health sector adjustment programme (€ 50 million). This reform involves measures to improve access to and the quality of popular health care by rationalising the management of both public and private sources of financing.

Financial sector adjustment programme (€ 52 million). This programme sets out to restructure the financial sector by adapting the institutional and regulatory framework.

Participative rural development in the Central Middle Atlas region (Khénifa Project) (€ 9 million). Objective: Improving living conditions for rural populations in 12 communes of the Province of Khénifra, in particular by introducing rational, participation-based and integrated natural resources management.

GEFRIF: H ISTORY OF A SUCCESS STORY

Integration and participation” are the key words of the GEFRIF project (€ 4.45 million), devoted to protecting and managing the forest ecosystems of the Rif (Northern Morocco). This pilot initiative tested out an integrated (ecological, economic and social) approach to rural development. Involvement of the local population at every stage has been the key to its success. At the end of the project, the living conditions of the local population have improved (new tracks, bridges, water points). Purchasing power has risen significantly. Land ownership conflicts have been settled and deforestation halted.

The GEFRIF project was selected by Morocco to be presented at the Hannover EXPO 2000 as an illustration of successful sustainable development. It has also provided the pattern for two other MEDA initiatives: Integrated rural development (€ 28.4 million) and Participative development of the forest and semi-forest areas of Chefchaouen province (€ 24 million).

Syria

The negotiations concerning the Association Agreement resumed in 2000. EU efforts in Syria between 1996 and 1999 concentrated on key institutional areas including the reform of administrative and economic structures, support of the business sector, and development of human resources. Three projects were signed, totalling € 38 million. The most important was the Syrian European Business Centre funded for € 12 million.

Tunisia

Three new projects, totalling € 75.7 million, were committed in 2000.

Support programme for the reform of basic education (€ 40 million): Help in reforming basic education in order to support socio-economic development. The programme seeks to enhance Morocco’s human resources in order to prepare the country social, political and economic change.

Support for the private sector (EIB), venture capital (€ 30 million): The project is aimed at increasing the capital resources of companies in the process of being privatised.

“Solid waste” – interest subsidies on EIB funding (€ 5.60 million). The project seeks to introduce regional solid waste management systems, based on refuse tips and related transfer centres across the entire country.

Turkey

The year 2000 was the first in the new climate of EU-Turkey relations, after Turkey’s status as a candidate for EU accession had been recognised at the Helsinki European Council in December 1999. The first stages of the accession process have now started on the Community acquis, and customs union in the public procurement and services sector. Procedures to allow Turkey to participate in Community programmes and agencies have accelerated.

Meanwhile, Turkey remains both a full participant in the Barcelona Process and a beneficiary under MEDA regional programmes. By mutual agreement, the lion’s share of Community financial assistance in 2000 was spent on the government’s economic reform programme, drawn up in consultation with the Turkish government and the World Bank, and supported by a Structural Adjustment Facility (€150 million in two equal parts). During 2000, a € 10 million widening of the Jean Monnet Scholarship programme opened the way for further training to be given to Turkish university graduates, young civil servants and private sector employees wishing to follow postgraduate university studies in an EU country.

An important infrastructure project for Bursa, once the capital city of the Ottoman empire and now expanding rapidly due to rural immigration, is the Bursa Wastewater treatment project. With MEDA paying the € 16 million interest on an € 80 million loan from the European Investment Bank, a new water treatment facility in being built to reduce pollution from city waste water dumped in the Nilüfer River which flows through the city.

A VCILAR “H OUSE OF H OPE ”

The Avcilar “House of Hope” is a shelter in Istanbul which provides street children with health advice, education and counselling from volunteers; as well as meeting their basic needs. According to the head of the Association which runs this project it was through EC funds that the home was rescued from financial crisis, and helped it to overcome other setbacks, thereby assuring it of a long term future. This small NGO project, signed in 1998 and implemented in 1999-2000, is one of MEDA’s success stories. The EC also helped another charity, the Volunteers for Street Children, with assistance worth € 70 000.

West Bank and Gaza Strip/Palestinian Authority

When violence erupted after the second Intifada in September 2000, the Palestinian territories were closed off by the Israeli Army. This locking up of Palestinian territories abruptly halted the economic growth and institutional reform that had being proceeding steadily during the first half of 2000. In a context of major crisis and possible regional destabilisation, the European Union is still standing firm by its democratic and human values, the model of economic development it represents, and the conclusion of a durable peace agreement, based on mutual understanding and security.

Palestine’s civil population appears to be the first victim of this economic blockade. In this critical context, the EU’s top priority is to improve the living conditions of Palestinians and try to convince people that there is no other realistic alternative to the peace process. The European Community had a specific budget of around € 20.4 million in 2000, in addition to the funds provided by the MEDA programme, to finance its cooperation with the Palestinian Authority.

E ASING CASH - FLOW IN P ALESTINE

After the outbreak of the ‘Al Aqsa intifada’, the Israeli authorities decided to freeze the monthly transfers of clearance revenues (VAT and custom duty receipts) cashed by them on behalf of the Palestinian Authority as a result of their control on all entry points to the Palestinian Authority’s territories. This action resulted in a further deterioration of the Palestinian population’s situation. Given the gravity of the situation, the General Affairs Council requested the EU to set up a second Special Cash Facility on 13 December 2000 of up to € 90 million, as it had done in 1997 (for € 27.6 million). These additional funds were converted into direct budgetary support aimed at easing the budgetary impact of any Israel government freeze on monthly tax receipts transfers. These payments have helped to meet current administrative expenses of the Palestinian Authority (eg. Payment of civil servant salaries, education, health and other public services). However, the December 2000 General Affairs Council laid down some conditions for the releasing of funds - including proper budgetary control by its Finance Ministry, the stabilisation of current expenditure and the adoption of a balanced budget. In the light of this, the Palestinian Authority gave a written commitment to pursue financial and administrative reform, and the EU then allocated responsibility for developing a detailed plan for implementation of approved reform measures to the Palestinian Minister of Planning and International Cooperation.

By adopting and implementing within a very short period this exceptional financial measure, the European Union has preserved the institutional framework of the Palestinian Authority and prevented a further deterioration in the civilian situation. As the major donor to the Palestinian Authority, the EU has also confirmed its place in the Middle East Peace Process.

Putting extraordinary events aside, the MEDA programme was used to finance other actions in the West Bank and the Gaza Strip during 2000. These included a crucial project to provide wastewater treatment services for some 80% of the Palestinian population of the Northern Gaza Strip (the world’s highest population density). The EU supported this by subsidising the € 3.7 million interest rates on an EIB loan. Going further, the MEDA programme also put up the risk capital (managed by the European Investment Bank) of € 3 million needed by the Cairo Amman Bank to provide long-term funding to assist Palestinian SMEs in all business sectors to start up, or to expand.

8. R EGIONAL CO - OPERATION PRIORITIES

Regional co-operation at the multilateral level represents one of the most innovative aspects of the Euro-Med Partnership, embracing the political, economic and cultural fields.

The year 2000 was a milestone in the development of regional programmes. The Commission Communication “Reinvigorating the Barcelona Process” stressed the strategic importance of regional and sub-regional co-operation, and of co-ordination between regional and bilateral programmes. Co-operation at regional level may act as a catalyst to encourage bilateral operations and enhance economic and social development. Regional programmes may be used to work towards trade liberalisation and convergence of regulatory frameworks in the fields of competition policy, public procurement, intellectual and industrial property, and standardisation. Several regional activities and programmes covering the three chapters of the Barcelona Process were launched or implemented during the year.

9. R EGIONAL CO - OPERATION ACTIVITIES IN 2000

Industrial co-operation

2000 was devoted to themes agreed at the Limassol ministerial meeting (1999) namely investment promotion, innovation and quality, SMEs, and developing Euromed market instruments and mechanisms. €9.9 million was decided in 2000 and earmarked for promoting the region’s single market instruments (Euromed Market). €15 million was decided and committed in 2000 to launching the promotion of innovation, technology and quality in private enterprises (Euromed ITQ). An Industrial Co-operation Working Group discussed a possible regional programme on SMEs. Business-to-business contact meetings co-sponsored by the EU also helped to foster North-South and South-South industrial co-operation.

Environment

The Short and Medium-term priority environmental Action Programme (SMAP) was decided in 1999 and mostly in place by the end of 2000. Adopted in Helsinki in November 1997, SMAP’s priority fields of action include integrated coastal zone management, ‘hot spots’ (polluted areas and threatened biodiversity elements), and measures to combat desertification.

During 2000, contracts totalling approximately € 5 million were signed implementing the first phase of SMAP. The major source of funding is MEDA, although other existing funds may be used, and efforts will be made to attract additional public and private donors.

Information Society

Closing the technology gap between the EU and its Mediterranean partners is the goal of Eumedis, the Euro-Mediterranean programme on the Information Society decided in 1998. The idea is to increase the connection of MEDA countries to the Internet and launch sustainable electronic platforms of co-operation and services to the public. During 2000, a call for proposals was published for up to € 35 million, and will lead to the funding of ICT pilot projects in the fields of healthcare, education, electronic commerce and economic co-operation. ICT is also used for the promotion of cultural heritage and tourism, and industrial technologies. Contracts totalling more than € 2 million were signed with Information Society Focal Points in each of the 12 Mediterranean Partners to assist organisations in their countries in responding to the call for proposals.

Eumedis complements another regional project: New Approaches to Telecommunications Policy (NATP), which was funded by the EU for €2.5 million and began in June 2000.

Local water management

Water is in short supply in southern Mediterranean countries, and natural resources are not equally distributed among different states. Water management and sharing is vitally important. If not solved on a fair and durable basis, water shortages could be a source of tension between Mediterranean countries, leading to a major regional crisis.

Considering the geopolitical importance of this regional stake, the EU is working for all 12 Mediterranean partners to agree an equitable and long-lasting regional water programme. A new consultative body, the Euro Mediterranean Water Forum (EMWF), held its first meeting in Brussels in June 2000. All 15 EU Member States and all 12 Mediterranean Partners are represented. The Commission intends to present the proposal for a regional water programme (as required by the Turin Ministerial Conference on Local Water Management) in the course of next year.

Transport

The Euro Mediterranean Transport Forum composed by the 15 Member States and the 12 Mediterranean Partners had its annual meeting in November 2000 and continued its work aimed at developing regional co-operation in the transport sector. In the November 2000 meeting the Forum approved the establishment of working groups dealing with specialised transport issues: maritime transport, global navigation satellite systems, infrastructure network and research and development, the last one having a specific

nature related to the preparation of the call for proposals in the framework of the 5 th R&D

framework programme.

The implementation of the ongoing maritime projects included in the package approved by the Commission in 1997 continued during 2000. Some of the projects of the package have already been completed and others which had faced administrative delays could be launched.

In the framework of the regional project of co-operation on statistics a specific subproject regarding transport statistics has been launched. Due to the collaboration among partners which had already been developed it was possible to make substantial progress towards the design of a statistical data basis for the transport sector in the Mediterranean region.

During the year 2000 the preparation of a new project on the transport policy in the Mediterranean Region reached an advanced stage and the general lines of the project were submitted to the Mediterranean Partners and endorsed in the Transport Forum meeting of November 2000. The project is aimed at improving the efficiency of the Mediterranean transport system in order to support the development of the Euro Mediterranean Free Trade Area. The project will assist in the preparation of the overall diagnosis of the regional transport system and of a Regional Transport Action Plan addressing both policy and institutional measures and physical infrastructure issues; among other matters the project will also contribute to the reinforcement of the policy dialogue among regional actors, promote the co-operation of the private sector and establish tools for monitoring the performance of the sector. The project is expected to be approved by the Commission during 2001 and implementation is expected to start before the end of 2001.

Energy

During the year 2000 grant contracts for the following three projects in the energy sector were signed:

• “Energy and urban environment in Mediterranean Partners”: (EU contribution €

1.9 million) concerns the local level and aims at the creation or the development of local teams in pilot cities of the 12 partners, in the field of urban energy programming

and management of energy.

• “Mediterranean electric ring“: (EU contribution € 2.1 million), envisaged as a cofinancing

project aims to examine the consequences of looping the Mediterranean by

electrical supply networks.

• “Mediterranean training network in energy policy”: (EU contribution € 1.8

million) This project trains decision-makers' in the field of energy and creates national associations in the field of energy. Contracts for four projects of the energy programme are expected to be signed by the Commission during 2001 with implementation starting before the end of 2001.

Audio-visual

The EU aim is to promote European culture in the South Mediterranean and to foster cooperation between EU and South Mediterranean cultural operators/professional. In the first phase of the Euromed Audiovisual programme, six regional projects were started during 2000 in three sectors: preservation of audio-visual archives, support to production and co-production, and support to broadcasting, distribution and circulation of audiovisual works – including training in cinema and television work.

The total budget decided in 1999 is € 20 million. The first network meeting, linking up all six projects, was held in Rabat in September 2000.

The Euromed Audiovisual programme organised a travelling Arab Mediterranean film festival in late 2000/early 2001. These pictures are taken from films shown during that festival.

Cultural heritage

Euromed Heritage is the regional programme to conserve and develop the Euro Mediterranean region’s cultural heritage decided in 2000. Drawing together diverse traditions and customs, it encourages increasing openness and tolerance in the region, in the hope that this will ultimately contribute to peace and stability. During 2000, the preparation of a second Cultural Heritage programme started.

Economic and social

In the course of the year 2000, contracts were signed, with an EU grant totalling €1.3 million, in support of two economic and social councils in the region:

Youth

The Euromed Youth Action programme decided in 1998, started with € 9.7 million, is now fully operational. Its importance was stressed in the Marseilles Youth Declaration of the November 2000 Civil Forum. The main goal is to improve mutual understanding and cohesion between young people across the Mediterranean basin, based on mutual respect, tolerance and dialogue between the various cultures. More than 150 projects were financed during 1999/2000, ranging from youth exchanges to volunteer service and support measures. As a result, there is an urgent need to proceed with the preparation of a second programme.

Middle East peace projects

During 2000, the Commission was able to successfully launch a new package of Middle East peace projects which the aim to foster an integrated approach to common problems in the region. They are also used to demonstrate the possibility of concrete Israeli-Arab co-operation.

Progress in carrying out these peace projects has been satisfactory. Highlights of the diverse activities included water sector improvements, regional veterinary co-operation and a research study on the issue of regional economic integration in all Mashrek countries. Also covered is the People to People programme of operations, run by civil society organisations, which is an essential motor for promoting peace in the Middle East. It was continued with the signing of 17 new grant contracts.

The 2000 package renewed assistance to the People to People programme. It also supports cross-border co-operation activities, with Israelis and Arabs holding meetings at non-governmental and expert levels. Other projects in fields such as environment, judicial, science education and media co-operation are also included in the package decided in 2000 with a total budget of € 22.9 million.

10. C O - OPERATION ACTIVITIES IN THE M IDDLE E AST /G ULF REGION

Gulf Co-operation Council

Bahrain

Kuwait

Oman

Qatar

Saudi Arabia

Relations with the six countries of the Gulf Co-operation Council Bahrain

(GCC) are conducted under the terms of the 1989 EU-GCC Cooperation

Agreement. The Directives agreed by the EC Council in Kuwait

1991 for negotiating an EU-GCC Free Trade Area have been Oman

reviewed to take account of interim changes in the world economic Qatar

situation, particularly regarding trade and investment. Saudi Arabia

In the meantime, practical EU-GCC co-operation has been agreed, UAE – United

particularly in the areas of standardisation, customs procedures, Arab Emirates

energy, and environment.

Yemen

The second EU-Yemen Co-operation Agreement of 1998 continued the 1990 agreement in providing assistance for managing water supplies, promoting the development of fisheries, and technical aid to rural development.

Iran

The European Community has no significant financial co-operation with Iran. However, a Comprehensive Dialogue group, initiated in 1998, holds high level meetings every six months. There are also joint EC-Iran working groups to discuss questions of energy, trade and investment, and experts meet to discuss how to tackle refugees and drug trafficking.

In recent years, Iran has shown strong interest in strengthening its relations with the EU, and in negotiating a trade and co-operation agreement. The Council of Ministers asked the Commission in November 2000 to present a proposal for a negotiation mandate. Yet, if co-operation is to be deepened and extended, a number of political and economic challenges will have to be addressed., including issues of human rights, regional security and international security.

I NFORMATION ACTIVITIES

The European Commission uses publications and information visits to publicise the Euro Mediterranean Partnership. Six information visits have briefed specific groups of journalists, business people and NGO representatives from the 12 Mediterranean Partners. The Commission Delegations in the Partner countries have also organised cultural and information activities at a total cost of € 2 million.

Publications include :

– a weekly newsletter, Euromed Synopsis, covering current and future events;

– a monthly calendar of official meetings;

– a monthly Euromed Special Feature on a specific topic;

– an irregular Euromed Report, reporting EU communications, conclusions and statements;

– a brochure reviewing the first five years of the Barcelona Process; and

– a brochure reviewing 25 years of co-operation between the EU and the Maghreb.

All these publications, together with Information Notes and other news, are available at:

http://europa.eu.int/comm/external_relations/med_mideast/intro

11. H ORIZONTAL POLICIES

European Initiative for Democracy and Human Rights (EIDHR)

The EIDHR’s priorities in 2000, in the MEDA region, have been to gain support for women’s and children’s rights, to work towards the abolition of the death penalty, and to promote inter-ethnic dialogue and co-operation with the High Commissioner for Human Rights.

€ 8 700 000 of commitment appropriations have been devoted to these policies.

The development of Euro-Mediterranean inter-parliamentary relations, the promotion of human rights and democracy, the development of the organisations of civil society and the rule of law are other priority objectives.

W OMEN IN THE M AGREB

At three multi-resource centres dedicated to them in Algiers, Tangiers and Tunisia, women can obtain practical information, legal advice (family questions, employment, criminal law), health information and, where necessary, psychological help. These centres offer expert advice, free of charge, either face to face or by phone. In particular they provide support to women who are victims of violence and sexual harassment. Seminars, training and awareness-raising actions (communication methods, women’s rights, new technologies, etc.) are organised there for paid and volunteer staff and counsellors. This project, which is co-ordinated by the Italian organisation IMED (Istituto Mediteranneo), enjoying a support of € 1.4 million, is being carried out in partnership with women’s protection associations, trade unions and NGOs from the central Maghreb region. This project, the relevance of which goes well beyond the promoting of women’s rights, should also impact the development of the democratic process in Maghreb countries.

Assistance to displaced populations

Actions in favour of refugees in the Mediterranean zone have related essentially to Palestinian populations. They fall under the convention signed between the European Community and the United Nations Relief and Works Agency for Palestinian Refugees, concerning refugee assistance in Middle East countries 46 . Education and primary health care operations to help refugees in the West Bank, Gaza, the Lebanon, Jordan and Syria have been undertaken by UNRWA to the tune of € 40 million.

Rehabilitation

A number of projects were undertaken in 2000 in the Mediterranean zone to the amount of €33.3 million, in particular in Algeria, Jordan, the Lebanon, Yemen, the West Bank and Gaza.

Co-operation activities of the European Investment Bank – EIB

The EIB signed 19 loans to eight Mediterranean Partners during 2000. These commitments total € 1.193 million, up from € 945 million in 1999. Major investment went into reconstruction of infrastructure and industry in Turkey after the 1999 earthquake. Other sectors receiving loans were transport, communications, energy, environmental protection, industry and tourism.

46 Council Regulation (EC) No 443/97 i of 3 March 1997, the validity of which was extended until the

end of 2000.

The EIB also managed the MEDA funds which subsidised the interest costs for three EIB bilateral environmental project loans (€ 38 million) and four risk capital operations (€ 68 million).

Activities of the Humanitarian Office of the Commission (ECHO)

In 2000, the financial decisions for humanitarian aid for the Mediterranean partners amounted to € 48.4 million, distributed as follows :

FINANCIAL DECISIONS FOR HUMANITARIAN AID BY REGION IN 2000 (ECHO)

MIDDLE EAST/NORTH AFRICA DECISIONS IN € Million.

TOTAL 48.495

Algeria 0.300

Iraq 8.600

Middle East 23.920

Western Sahara 13.935

Yemen 1.740

12. C ONCLUSION : A POSITIVE ASSESSMENT IN SPITE OF STRUCTURAL

DIFFICULTIES

The Barcelona Process has been able to demonstrate several remarkable successes – although five years is not long enough for it to deliver all its promises. Initial expectations were high, boosted by the bright prospects of agreement that the Middle East Peace Process appeared to offer in the mid-90s – perhaps they were too high to live up to.

The crisis situation in the Middle East has seriously endangered the Peace process and had a strong detrimental effect on regional co-operation in general. These shortcomings were so substantial that they called into question the political determination of both sides to achieve the goals they set in 1995.

On the positive side, despite serious political odds, the Union has been able to initiate and formalise continuous dialogue amongst its 27 partners. The multilateral approach is now more widespread – even prevailing over traditional bilateralism. All EU Member States recognise the strategic importance of the EU’s southern neighbours, so substantial financial assets have been committed to the Mediterranean region and the first encouraging results of the reform efforts in the Mediterranean Partners are now tangible.

On the other hand, it has been more difficult than anticipated to establish a free trade area, illustrated by the slow progress in negotiating Association Agreements, as well as the slow ratification procedures for Agreements already signed. Here, both the Mediterranean Partners and the EU Member States share the blame. South-south integration is still moving forward at a snail’s pace, thus failing to attract sufficient inward investment.

Too many small-scale projects were set up in the enthusiasm of the early stages of the Barcelona Process, without care being taken to set priorities. As a result, implementation was generally slow, and the low absorption capacity of the Partners also delayed the disbursement of available funds in previous years. Nevertheless, this tendency has been reversed in the year 2000 as a result of a considerable effort to « clear up the weight of the past ». The EU Council of Ministers decided to endow MEDA with € 5.350 million for 2000-2006. These grants from the European Community budget are accompanied by substantial lending from the EIB, whose lending mandate over the same period is € 6.400 million. The EIB has promised to contribute a further € 1.000 million from its own resources. This means that a total of nearly € 13 billion will be available for the Euro Mediterranean Partnership to use over the seven-year period starting from 2000.

13. P ERSPECTIVES

In spite of the particularly difficult political context of the year 2000, the objectives agreed on at Barcelona in 1995 - and reaffirmed at the Conference of Marseilles – remain fundamentally valid and even increasingly relevant. The European Commission’s overriding strategy is to look at how the partnership can be focused on a clear set of short and medium term goals that are ambitious but achievable ; and also, how to increase the sense of « ownership » of the partnership among our Mediterranean partners. Bearing in mind this new pragmatic approach, the priorities are:

• To develop South-South trade and co-operation including on a sub-regional

basis : all countries signing an Association Agreement will have to conclude free trade agreements between themselves within five years. This is the only way to ensure the establishment of an effective overall EU-MED free trade area by 2010. Tunisia,

Morocco, Egypt and Jordan have already announced their intention to do so.

• The development of sub-regional trade needs to be accompanied by greater subregional

co-operation : trading opportunities will not be used unless the infrastructure is implemented. Specific efforts need to be made to develop the interconnection of the transport, energy, telecommunications systems, water, environment and industry, using an appropriate mix of financing from the MEDA

programme, the European Investment Bank and other lenders.

• To harmonise measures relating to the single market : a timetable should be in place

by 2002 for priority sectors such as rules of origin, customs, norms and standards and intellectual property rights protection. Implementation should start in 2004 both between the partners and the European Union and among the partners themselves. These measures will increase the attractiveness of the region to investors : an open market with a sound and predictable legal and administrative environment is the best

way to ensure that levels of local, European and world-wide investment will increase.

• To improve the MEDA programme : future MEDA allocations will be more closely

linked to the association process and to the programme’s key objectives, in particular the implementation of effective economic reforms. One of the results of the reform of the Commission’s external aid system will be to make available more human

resources, from which the Mediterranean region will benefit.

• To develop the important role of co-operation in the field of justice and home

affairs : working in close concertation with the Mediterranean partners on a programme covering refugees and asylum, the fight against illegal immigration and

trafficking in human beings.

• To take account of the social effects of economic transition by promoting education

and training, as well as actions on health and social security systems.

• To promote and strengthen the partnership in social, cultural and human affairs : development of cultural programmes such as that relating to cultural heritage ; launching the second phase of the audio-visual co-operation programme and launching of new programme on human sciences.

In an uncertain international context, the years to come will be decisive for the southern Mediterranean region.. It is therefore the common duty of both, the European Union and its Mediterranean partners, to achieve the common objectives - agreed at Barcelona and Marseilles - to work together for peace and stability, shared prosperity and better mutual understanding among peoples of different cultures and traditions.

VI Africa, Caribbean, Pacific

On 23 June 2000, the European Union signed a new Partnership Agreement with 77 African-Caribbean-Pacific (ACP) countries in Cotonou (Benin). Lasting 20 years (2000 – 2020), it replaces all former Lomé Convention agreements. The Cotonou Agreement sets out the future framework of co-operation), trade and political dialogue between the European Union and the ACP states. It has also welcomed six new Pacific island partners: the Cook Islands, the Republic of the Marshall Islands, Micronesia, Nauru, Niue and Palau. Together, the ACP signatories represent more than 650 million people. The first part of this section explains the new Agreement in some detail. The second part looks at progress in key policy areas.

1. T HE C OTONOU A GREEMENT

The EU-ACP partnership is the world’s largest financial and political framework for North-South co-operation. EU ties with ACP countries have been regularly updated and adapted to new

global conditions since the first Lomé Convention was signed in ACP’s 77

1975. This has made the Lomé Convention one of the most countries and

forward looking development partnerships in the world. 13 Overseas countries and

Nevertheless, in spite of the successes of Lomé, by the end of the territories can last decade, both parties were convinced that more could be be found at the achieved through ACP-EU co-operation. This conviction led to end of this the development of a new framework for partnership known as section

the Cotonou Agreement. The Cotonou Agreement, which was signed in June 2000, retains the former Conventions’ deeprooted respect for social, economic, political and human rights, alongside aid and trade concessions. However there are a number of differences, of which the most important are outlined below:

1.1. An updated strategy for poverty alleviation

The global strategy for development in the new Agreement will operate in a coordinated framework, using realistic parameters to measure progress. Each ACP country will have a development strategy tailor-made for it, and will be encouraged to take over ownership of the resulting economic and social reforms. Greater efforts will be made to ensure that globalisation and changes in technology do not end up excluding the poor, who should rather be benefiting from improved access to education, health care and other essential services. The Agreement also focuses on such issues as gender and sustainable economic development.

T HE FIGHT AGAINST POVERTY

Fighting poverty is at the heart of the new partnership, which reflects existing international commitments such as the conclusions of UN conferences, and consensus among donors in the OECD Development Assistance Committee. These priorities were also reaffirmed at the G8 summit in Okinawa (Japan) in July 2000.

The poverty reduction goal is situated in the context of sustainable development and the progressive integration of ACP countries into the global economy. There are five inter-linking priority areas:

• building up a comprehensive political dimension;

• promoting the widespread use of participatory approaches;

• strengthening the focus on poverty reduction;

• setting up a new framework for economic and trade co-operation; and

• reforming the organs of financial co-operation.

1.2. Revised framework for trade

The non-reciprocal trade preferences enjoyed by ACP countries, long the centrepiece of the EU-ACP relationship, have been disappointing in their real impact on ACP export performances. The ACP's share in total imports of the EU declined from 6.7 % in 1976 to 2.8% in 1999. Moreover, these preferences required a waiver from the WTO rules. This has led to the development of a revised trade framework under the new Agreement which is by far more comprehensive, ambitious, but realistic, and fully complies with WTO rules. Its objectives are:

• The smooth and gradual integration of ACP economies into the world economy;

• The enhanced supply and trading capacities of the ACP countries;

• The creation of a new trade dynamic with a view to facilitate the transition to a

liberalised global economy.

To achieve these objectives, the ACP and the EU agreed to negotiate new, WTO compatible trading arrangements, removing progressively barriers to trade between them and enhancing co-operation in all areas relevant to trade. To this end, Economic Partnership Agreements (EPAs, see box) shall be negotiated, building on regional integration initiatives existing within the ACP. Formal negotiations of EPAs shall start in

September 2002 and EPAs shall enter into force by 1 January 2008 at the latest. 47 During

the entire preparatory period, the non-reciprocal Lomé trade preferences will be maintained. The period up to the start of negotiations shall be used for deepening the regional integration and strengthening the negotiating capacity of the ACP. In 2004 the Community will assess the situation of the non-LDC which, after consultation with the Community, decide that they are not in a position to enter into economic partnership agreements and will examine all alternative possibilities, in order to provide these

105 countries with a new framework for trade which is equivalent to their existing situation and in conformity with WTO rules.

E CONOMIC P ARTNERSHIP A GREEMENTS - EPA S

Economic Partnership Agreements will maintain and even improve the preferential market access for the ACP, but this, given past experience, is by no means their main purpose. They will go far beyond this objective. Building on regional integration initiatives existing within the ACP, EPAs will consolidate and even deepen these initiatives. Furthermore, by removing border measures to trade between all parties, as well as other factors causing market segmentation, they will lead to the creation of largely integrated economic areas between the ACP and the EC. This economic integration between the ACP and the EC, governed by a stable, predictable and transparent framework, will enlarge the markets of the ACP, will allow for economies of scale, will improve the level of specialisation, will increase competitiveness of the ACP and will attract investment. This, in turn, will lead to an increase in trade flows in the region, with the Community and with the rest of the world, thereby promoting the sustainable economic and social development of the ACP.

Protocols on sugar, beef and veal will have to be reviewed in the framework of negotiations for new trading arrangements. The ACP states will select the regional bodies that would be candidates to form EPAs. *

In addition, the 40 LDCs that are part of the ACP as well as all other LDCs will benefit from the recently adapted, groundbreaking regulation that provides unrestricted duty-free access to EU markets for all products from all LDCs, with the exception of arms and ammunitions. **

• * 

  Cotonou Agreement Articles 36(4) and 37(7)

** Council Regulation (EC) N°416/01 adopted in February 2001, amending Council Regulation (EC) No 2820/98 i applying a multi-annual scheme of generalised tariff preferences for the period 1 July 1999 to 31 December 2001 so as to extend duty-free access, without any quantitative restrictions, to products originating in the least developed countries.

1.3. Focus on good governance

Good governance on both sides is vital to make the partnership succeed. The EU and ACP countries have agreed to discuss this regularly. They have also signed up to a new procedure whereby, in cases of serious active and passive corruption, aid can be suspended. This is a real innovation, both in the EU-ACP context and in international relations, and sends a clear and positive signal to European taxpayers and investors, and to those to whom aid is officially directed. Where ACP countries are involved in armed conflict, the new Agreement also includes measures to prevent European taxpayers’ money from being used for military purposes. The Commission is adamant that, when aid is suspended or frozen, all due care must be taken to reduce to a minimum any adverse consequences for civilian population as a result of aid-related sanctions.

1.4. Financial allocations linked to results

Under Cotonou, a single Country Support Strategy (CSS) will cover all operations in a given ACP state. The CSS will not only analyse the political, economic and social context of the country and outline its further development strategy, but also take into account the activities of NGOs and other donors. Based on this analysis, a suitable orientation for the use of EU aid will be suggested. Each country’s CSS will be reviewed regularly, and necessary adjustments made. Each country will, however, be held accountable for its own policies.

Each country will also be allocated a resource envelope intended for use over a period of five years. This envelope is divided into two parts: the basic country allocation and an additional allocation for such purposes as debt relief, additional assistance in case of shortfalls in export earnings, and – in exceptional circumstances – humanitarian aid. However these country allocations are no longer automatic, but are made on the basis of defined needs and also performance. They can therefore be reviewed and revised. Performance will be assessed on:

• progress in implementing institutional reforms;

• the use of resources;

• effective implementation of current operations;

• poverty alleviation or reduction;

• sustainable development measures; and macroeconomic and sectoral policy

performance.

Regional Support Strategies (RSS) will also be established for the main regions with which the EU works, and will be subject to regular review. However for RSS, allocations will be decided upon real progress made and opportunities for further regional cooperation and integration.

1.5. Rationalisation of financial instruments

Under Cotonou, financial instruments have been regrouped and rationalised to avoid duplication. Under previous agreements, the European Development Fund (EDF) – which is separate from the EC budget – was divided into several instruments which each used different procedures and programming methods. As a result, the coherence of Community assistance was lost, country programming was inflexible, and there was no single point of dialogue between the Commission and the partner country.

Under the Cotonou Agreement, all EDF resources are channeled through two financial instruments, the EDF and the Investment Facility - which is managed by the European Investment Bank (EIB, see box). The first of these provides grants, and the second provides risk capital and loans to the private sector. The grant envelope for support to

long-term development (€ 10 billion from the 9 th EDF and € 1,3 billion in regional

allowances) will be revised every five years together with the Cotonou Agreement. The

9 th EDF is further boosted by a € 1,7 billion available in European Investment Bank

(EIB) loans and represents a total of € 13 billion. This amount, which is 5% more than

the 8 th EDF, covers the period 2000-2007. Almost € 10 billion of unused resources from

the previous funds have also been made available during the same period.

E UROPEAN I NVESTMENT B ANK – I NVESTMENT F ACILITY

The European Investment Bank (EIB) will manage the Cotonou Agreement’s Investment Facility (IF - € 2,2 billion) which replaces the Lomé IV risk capital and interest rate subsidy facilities. The IF is designed to support the ever-expanding ACP private sector. It functions as a revolving fund, and the returns accruing from its operations are expected to flow back to the facility. If this process functions correctly, in the long term, the Facility fund will no longer need topping up from EDF resources. The IF support is available to all private enterprises in ACP countries that earn income and are commercially and economically viable. To a limited extent, some public enterprises may be eligible through direct or indirect access. IF support is used for privatisation operations, for capacity-building to stimulate investment of internal and external savings, and for providing leverage for foreign investment.

Two export instruments, STABEX and SYSMIN, have been abandoned as they did not meet expectations. Introduced in the 1970s, they were supposed to compensate countries when commodity prices fluctuated to their disadvantage. But the funds were too often received too late to have the impact sought. Under the new Agreement, an ACP country will be encouraged to submit estimates of anticipated losses to the EU before they occur. It may then expect to receive an advance payment of up to 80%, which is supposed to be used to finance the national budget. These compensation funds will come from the general long-term assistance envelope.

2. K EY P OLICY AREAS

2.1. Economic co-operation

Economic co-operation is a key element of ACP-EU co-operation. It currently focuses on supporting structural adjustment programmes and economic reforms, the development of a competitive private sector and debt alleviation, mainly through the Highly Indebted Poor Countries (HIPC) initiative and based on the Poverty Reduction Strategy Papers, to be prepared by the partner countries.

Structural adjustment and support to economic reforms

Providing support to structural adjustment programmes has become an integral part of the Community’s financial and technical co-operation with ACP countries. Since 1992, the Community has funded structural reform to the tune of € 2,334 million spent in 40 ACP countries. In former times, these funds were mostly used to prop up economies in trouble. Nowadays, the aim is to change the ways in which these economies work. Structural Adjustment funding is increasingly focused on linkages with poverty reduction.

The EU is also trying to bring about long-term changes rather than short-term fixes, and is working toward arranging joint programmes with other donors to avoid confusion in the recipient countries. During 2000, the Commission decided to allocate more than € 570 million for structural adjustment programmes in 19 ACP countries. At the same time, it authorised over € 350 million to be paid out in 25 ACP countries.

ACP COUNTRIES - Main budget lines

COMMITMENTS PAYMENTS

Available Conssumed % Available Consumed %

€ '000 € '000 € '000 € '000

EDF 3.932.000 3.757.000 96% 2.025.000 1.548.000 76%

South Africa 124.000 124.000 100% 132.000 110.000 84%

Democracy 15.813 15.166 95,91% 16.878 14.726 87,25%

Réhabilitation 17.000 16.432 96,66% 25.000 20.925 83,70%

Bananes 44.475 44.475 100% 10.350 3.354 83,70%

TOTAL 4.133.288 3.957.073 95,7% 2.209.228 1.697.005 77%

Development of a competitive business sector

The Community strategy for improving the performance of the business sector will examine what institutional and overall economic weaknesses exist in addition to the issues facing individual companies. It will also work for better co-ordination and collaboration amongst all economic players, public and private, and ensure that significant resources are set aside for financing investment and supporting entrepreneurship.

It is therefore important to improve the general environment for investment and business sector activities. Productivity and competitiveness can be improved if financial and technical support services are made available, either directly or indirectly through local service providers. Here, the EU’s business sector can be mobilised via the reinforcement of EU-ACP business co-operation, and encouragement can be given to private sector organisations to provide effective services and to work with governments.

The Community may also work with the financial sector to improve the quality and availability of financial services to private enterprise. This includes catalysing and leveraging flows of private savings, both domestic and foreign, into the financing of private companies in ACP countries. The Community will undertake to support local financial institutions, co-finance foreign investment, provide guarantees and other risksharing and risk mitigation devices for encouraging inflows of direct and portfolio investment.

The Commission allocated more than € 590 million to new initiatives in 2000. A number of instruments, and one financial facility, have been already put in place to attract additional resources to the private sector.

Support to debt alleviation and HIPC

The Highly Indebted Poor Countries (HIPC) initiative is a global scheme supported by national governments, the International Monetary Fund and the World Bank. The EU gives full support in its dual role as donor and creditor. The HIPC initiative allows countries to have their debts forgiven if they can fulfil the set conditions. So far, only three countries – Uganda, Guyana and Mozambique – have reached ‘completion point’ (when debt relief is granted) in the HIPC framework. However, now that the principle and working practices are well established, other countries are expected to follow shortly. Following the Commission’s financing decision of 24 July 1998, all Uganda’s remaining obligations in the form of special loans were wiped out to the tune of € 4,9 million.

Similarly, following the financing proposal adopted by the Commission on 16.12.1999, the near totality of the special loans to Guyana which represent an amount of € 6,44 million have been cancelled.

Concerning Mozambique, both the special loans and part of the risk capital operations have been written off out, the amount being € 19,8 million.

In view of the scale of the debt problem affecting developing countries (total debt stock for developing countries amounts to 2 530 US $ billion in 2000), the Commission has decided to increase the flow of funds to countries that are seeking eligibility to the HIPC initiative. It also assists them during the interim period when they are trying to meet the conditions for their debt alleviation and is trying to ensure that this debt forgiveness process takes full account all the social needs of the population of these countries.

2.2. Regional integration and institutional support

Through its policies concerning regional integration and institutional support, the Commission seeks to promote the sustainable social and economic development of ACP states, particularly through trade and market integration. If regional groupings between ACP countries are strengthened, this should enable them to play a more effective role in the global economy. At the same time, inside the ACP countries themselves, the population should derive benefit from improvements in economic efficiency and governance, leading to greater prosperity and scope for poverty reduction.

In all its development work, the Commission has always attached importance to strengthening regional integration groupings and to promoting human rights in the broadest sense. In all its development work, the Commission has always attached importance. With the increasing emphasis placed on these areas by the Commission and other donors, greater amounts are being allocated to institutional support and regional integration. Development projects of all types include measures to ensure good governance and the correct use of funds, which means that the money devoted to governance goes beyond just governance projects.

Regional integration

The goals of regional support programmes include:

– to develop and strengthen the capacities of institutions, governments and legislatures;

– to promote political and economic co-operation and integration;

– to promote sustainable social and economic development

The Commission works with a variety of regional organisations representing the ACP countries. During 2000, , the following activities took place:

❏ ❏ ❏ ❏ West Africa

The Union Economique et Monétaire Ouest-Africaine (UEMOA) groups the eight countries of the CFA franc in West Africa.

In addition, there is the Economic Community of West African States (ECOWAS) which comprises all the UEMOA members plus five other countries of which the largest is Nigeria.

UEMOA has made important progress in the area of integration. It has had a customs union since 1 January 2000, linked to a system of temporary compensation for losses in customs tariffs, harmonisation of financial legislation and of indirect taxation. The PARI 2 support programme (Programme Régional d’Appui à l’Intégration) signed in March 2000 amounts to € 65 million of which more than half is accounted for by budgetary support at the level of the member states. The other main component deals with capacitybuilding in the national administrations to implement reforms and UEMOA institutions.

ECOWAS has started implementing economic reforms at the regional level, for example, through introducing a common customs document. A new capacity-building programme for the ECOWAS Secretariat was signed in October 2000. Over the past few years, UEMOA and ECOWAS have started to work more closely together. ECOWAS intends to adopt a Common External Tariff in line with what has been adopted for UEMOA.

❏ ❏ ❏ ❏ Central Africa

There were political and economic reasons behind the limits to EDF support given in the past to this region. The main regional integration body in the area is the Communauté Economique et Monétaire d’Afrique centrale (CEMAC). The present EU strategy is twopronged: support of economic integration, based on regional reforms, and support for physical integration through improving the road infrastructure. Technical assistance has now been provided to CEMAC, enabling it to work on enhancing regional and commercial integration. A major ongoing programme in this region is dealing with environmental and forestry issues.

❏ ❏ ❏ ❏ Eastern and Southern Africa

A key player in this region is the Common Market for East and Southern Africa (COMESA), which has 20 members. It launched a free trade area in October 2000, and is aiming for a customs union by 2004. There is an active and generally successful programme to promote regional integration through trade development. The co-operation programme with COMESA amounts to € 46.7 million. The Commission also provides technical support to the Inter Governmental Authority on Development (IGAD) and to the East African Community (EAC) both of which co-operate with COMESA.

Another key player in this region is the Southern African Development Community (SADC)

A new capacity-building project has been decided during 2000. It has five components: regional integration, implementing trade and transport protocols, setting up a SADC trade tribunal, new systems for managing information and communication technologies, and statistics.

This region also includes the island states in the Indian Ocean, which are grouped in the Indian Ocean Commission (IOC). Co-operation with the IOC focuses on private sector support, tourism development and environment.

❏ ❏ ❏ ❏ The Caribbean and Pacific

Co-operation has continued through CARIFORUM (ACP Forum of Caribbean States), CARICOM (Caribbean Community) and the South Pacific Forum Secretariat.

– A € 1.3 million project Strategic Planning in Public Services began in 1999 to improve the ability of national CARIFORUM public services to formulate and manage their policies. It has started well, with operational links established with Haiti and the Dominican Republic.

– A € 4 million Caribbean Regional Anti-Money Laundering Programme, based in Trinidad, became fully operational in 2000. It provides assistance to most CARIFORUM countries.

– Cuba, which has observer status in CARIFORUM, signed a Trade and Economic Agreement with CARICOM in July 2000.

Another regional co-operation programme is with the Pays Africains de Langue Officielle Portugaise (PALOP) mainly to draw up legal, administrative and statistical support to public institutions.

In addition there is the so-called Intra-ACP Co-operation which benefits all or a large number of ACP states situated across different geographic regions. Important areas of cooperation include training, research and education, health and trade (assisting ACP countries to apply WTO rules and prepare for a new trade round).

Institutional support

The EC seeks to assist ACP countries in developing transparent, accountable and effective governance and administration in all public and semi-public institutions. It is working to strengthen the rule of law, while reinforcing the professionalism and independence of judicial systems; and helping to combat bribery and corruption. The Commission is providing technical assistance to the National Authorising Officers in most ACP countries to help them manage EDF and other donor funds. National staff are being trained to assume these responsibilities in the future. Five examples of the many types of institutional project supported by the Commission are given below.

❏ ❏ ❏ ❏ Burkina Faso

The Commission is supporting the Government in its programme of legal reforms. After a detailed study of the country’s needs, it decided to broaden its support to these reforms. The initial Support Programme to the Judiciary Administration is, therefore, to be supplemented by a second programme which amounts to € 16 million, to provide appropriate resources for representative political institutions, the electoral system, civil society (covering human rights and the media, in particular), and the participation of women in public affairs. The work in these areas has begun in May 2000.

❏ ❏ ❏ ❏ Mali

During 2000, the Commission began a wide-ranging five-year programme to support Government decentralisation of 682 communes, at a cost of € 39 million. The aim is to improve the services that the communes provide to the very poor. The programme provides practical help to enable the communes to deliver the public services for which they are legally responsible. They will be assisted by a network of advice centres and also a national fund for inward investment.

❏ ❏ ❏ ❏ South Africa

The signature and provisional application of the Trade Development and Co-operation Agreement with South Africa from 1 January 2000 was an important landmark in EU relations with South Africa. A minimum of € 360 million is due to be committed over the period 2000-2002, which includes the support to be given to democratisation, the protection of human rights, and a new emphasis on sound public management.

❏ ❏ ❏ ❏ Malawi

An € 8.5 million project to promote the rule of law and justice is providing training and technical resources to institutions such as the Ministry of Justice, the Judiciary, the Law Faculty, the Law Commission and the Prisons Service. Training is also given in ancillary institutions such as the Anti-Corruption Bureau, the National Compensation Tribunal and the National Archives. It was one of the first Commission programmes in the area of legal reform in an ACP country. Not surprisingly, it turned out to be complex. As it progresses, the programme is being adapted in the light of experience. It could prove to be a helpful model for future projects in the legal sector.

❏ ❏ ❏ ❏ Haiti

Despite difficult political circumstances, a € 4,44 million three-year project was started in 1999 to support good governance in the education sector. Its objectives of restructuring the Education Ministry, making management improvements and carrying out work on decentralisation, are being achieved. The project was helped by a government contribution of € 240,000 (included in the aforementioned figure as counterpart funds), and financial support was also forthcoming from the private sector, which it is heavily involved in the provision of education.

2.3. Health

Support from the EC is now also centred on prevention, health care, access to medicines, and the fight against AIDS. The reform of health systems and reorganising the provision of services – all part of the fight against poverty and inequality – are part of the Commission’s priorities.

Most of the financing approved under the 8th EDF is aimed at improving national health capacities and at understanding the problems of this sector as a whole. Funding ranges from traditional project support to co-financing operations and to budget aid. This approach should help lay the foundation for viable long-term health systems, making basic health services accessible to the most vulnerable sectors of the of population. More information can be found in pages 9, 10 and 36 of this document.

Support to sub-Saharian countries in this sector has increased very significantly since 1990. A sizeable part (around 35%) of this effort has been allocated, via the structural adjustment funds, as budget aid to the health sector.

In 2000, the Commission has implemented and monitored 120 projects in the ACP countries – including South Africa – representing € 760 million of aid. Various initiatives are also financed by other EU instruments (specific budget headings for AIDS and population control, co-financing with NGOs, etc.).

V ACCINATION : AN INNOVATIVE APPROACH

Eight Sahel countries have asked for help, not, as earlier, in paying for goods and services they could never afford themselves, but rather in meeting the financing of these expenditures. This is the original approach taken by the regional ARIVAS project (Project to Support Vaccine Independence in Sub-Saharan Africa). In this particular case, the EC financing in fact takes the form of management support. € 4.5 million have been committed.

In each country, a regional support cell is working in synergy with national players. The aim is to enhance consistency of action between the agencies involved in terms of the vaccines used and to develop regional co-operation between the eight beneficiary countries. The vaccines are provided via UNICEF.

The budgetary mechanisms, cross-frontier co-operation (loan of vaccines in the event of out-of-stocks, pooling of experience, etc.) have functioned well. This initial experiment should also facilitate dialogue with other intervening parties, and in particular the pharmaceuticals industry. This positive result has concluded with the launch of a new programme, which can potentially be extended to other ACP countries.

S OUTH A FRICA : MOBILISATION FOR AN ANTI -AIDS VACCINE

They are on the world’s AIDS frontline, and yet, what do they really know about this sickness? Africans know all too much about it. Often badly informed, some of them take part in clinical tests without knowing the objectives or the purpose. Even if they give their “free and informed consent” at the bottom of the document, this consent is often no more than a signature, if not a cross, in a country in which the majority of the population is illiterate, validating a form whose contents often give few explanations

It is in response to this cruel lack of information that the SA HIVAC project has been created in South Africa. Partners are the South African Medical Research Council (MRC), the University of Pretoria, the National AIDS Convention of South Africa (NACOSA), the AIDS Legal Network and the Commission, which is contributing € 1.8 million. The objective of the project is to make the population aware of what AIDS really is, to sensitise it to it, to present the need to develop a vaccine against this virus, to give advance instruction to those who could potentially take part in clinical tests and to make sure that human and legal rights are respected during these operations. This global, people-focused approach, can bring only good in terms of reducing the incidence of this sickness. It could serve as an example and be applied in other African countries, thereby establishing a vital basic fund of knowledge on this continent.

Rehabilitation sector

A wide range of projects are under way in a many countries, in particular in Angola, Mozambique, Liberia, Rwanda, Malawi and Haiti. European NGOs are initiating and operating these projects, amounting to € 16.4 millions, which are funded out of the thematic budget. As part of the rehabilitation effort, logistic of support is being provided for the return of refugees. This involves providing back-up support in various fields including re-starting farming production (Liberia), reconstituting herds the and free distribution of inputs (Angola).

EC INTERVENTION IN L IBERIA

A seven-year civil war (1987=1998) has destroyed the national economy of Liberia. Its legacy is social and economic disorder and great suffering among ordinary people. The EC remains the main donor to Liberia and since 1990, assistance has been limited to direct aid to the civilian population of Liberia. This has been done through NGO and private sector contractors, selected and supervised by Commission services.

Over the past five years, two large EC rehabilitation programmes (totalling € 52 million) have been operating to provide post-humanitarian aid, to avoid creating dependency, and to move the aid effort from relief to development. These have focused on meeting five basic needs: water and sanitation, health, electricity, food security, resettlement and reintegration.

Particular improvements resulting from EU assistance include:

• Water and sanitation: the EU has spent € 7,12million towards maintaining basic water

supplies in Liberia. 75% of Monrovia’s population have now gained access to safe drinking water.

• Health: The European Union has successfully delivered health assistance to 60% of

the Liberian population. During 2000 to 2001, € 5,83 million was spent on health projects targeting vulnerable groups (women, children and handicapped). They provided primary health care services and ensured that health assistance would reach

displaced returnees and refugees.

• Electrical power: National energy production has increased from 490,190kWh to

1,547,980kWh. Before the project was implemented, Monrovia, along with Mogadishu, was the only African capital city to have no electricity supply.

• Food security: The EC food security programme in Liberia started in 1997. Operating

mainly through NGOs, it encourages a return to normality by kick-starting sustainable agricultural production. As a result, food distribution was able to decrease from

55,000 tonnes in 1996 to 35, 000 tonnes in 1999.

• Some 55, 000 people have been successfully repatriated to their countries of origin.

2.4. Education and training

For more than 20 years, the European Commission has supported education in ACP countries. During this period, priorities have shifted, from building education infrastructure and providing vocational training and scholarships, to more general education and training activities and regional support. The EU own experience has shown that providing basic education and developing human resources are both linked to poverty reduction. They also favour economic growth, labour productivity, greater democracy and the rule of law.

Co-operation with ACP countries

By the end of 2000, there were more than 120 education projects in progress, on which the EC was spending a total of € 680 million. (€ 500 million of this came from the EDF and € 180 million came from the EU budget line for South Africa.) In the past, education and training projects and programmes had been evaluated on an individual basis. Attempts are now being made to assess the evolution and the impact of all EC support to education and training in ACP countries taken together.

The year 2000 also saw a breakthrough in the way that EDF funds could be disbursed in support of education. It is now possible to allocate them to government education budgets.

N EW APPROACH TO UNIVERSAL EDUCATION IN U GANDA

A new method of delivering education assistance is being tried out in Uganda where donor funds are being allocated directly to the Ugandan Government’s budget in the form of a Sector Wide Approach or SWAP. The main features of the SWAP in Uganda are:

– a well-formulated strategic framework for the whole education sector, with full discussion and involvement of all stakeholders;

– disbursement via official and accountable Ugandan government procedures - there is thus proper budgetary control of the combined resources;

– direct management without the need for project management units; the

SWAP is closely linked to national and local government reforms, and there are promises of future decentralisation to local level;

– a system which can evolve to meet changing circumstances due to monitoring and inbuilt flexibility.

The European Commission has agreed to provide €31 million of specific budgetary support to Uganda. Although definite progress has been made, the Ugandan government and its external funding agency partners are conscious that a lot more must be done if the country’s education access targets are to be met. Net enrolment should approach 100% by 2003, and at the same time, the pupil-teacher ratio should reduce to 50:1. The consensus is that the process is working reasonably well.

Co-operation with South Africa

The average value of South African education and training projects was € 15 million each, in comparison to the usual amount for ACP countries, which is nearer to € 5 million. Twelve projects in 2000 provided support, using a total EC grant of € 180 million. Within the specific South African context, these emphasize market-oriented skills, development and the regulatory environment (with five projects). Three projects concentrate on higher education. Two further projects focus on adult basic education and early childhood development. Primary education is receiving an overall sectoral support.

2.5. Rural development

Between 1986 and 2000, ACP countries allocated € 2.4 billion – that is 15% of the programmable resources of the last three European Development Funds – to crop and animal farming projects.

Institutional support

This type of support is designed to support development of genuine agricultural policies. It can be used for various purposes: strengthening institutions, defining rural development policies, managing external finance or training specialists (administrative and agricultural managers and technicians). Since 1986, 13% of agricultural financing has been in the form of institutional support. This share has, however, fallen off recently (1999-2000) due to the reduction in the number of projects submitted.

Production chains

This “cash crop” technical support is tending to become increasingly decentralised and integrated into projects that directly benefit local populations. Major investments are concentrated on a single crop type, with the aim of increasing productivity and/or yield with due regard for the local context.

Rice and export crops (coffee, tea, cocoa, tropical fruits, etc.) are the primary beneficiaries, even if this proportion is tending to diminish. These crops generally play a vital role in rural employment and export income. Coffee, for example, makes up 70% by value of Ethiopia’s exports. This support heading also includes the rehabilitation of crops areas that have been abandoned, destroyed or badly maintained.

In fact, 13% of programmable funds have been allocated to this project category since 1986, though this figure has fallen to 8% in recent years.

Water management schemes

These projects allow supplementary crop growing areas to be created , in most cases in semi-arid zones close to major sources of water. Examples are the sub-Saharan regions, which are exposed to food shortages, but which are watered by the Niger and Senegal rivers. The major schemes of the colonial and post-colonial periods (Mali, Senegal, etc.) have been replaced by micro-water management projects, created and/or supported by the EU. These more modest-sized projects (50 to 2,000 hectares in Madagascar, the Sahel or Haiti) are managed by local farmers with the technical assistance of consultants and NGOs.

Such water management projects are generally supplemented by flanking measures (infrastructures, solar energy, reforestation, cooperative management, literacy campaigns, micro-financing, trading, etc.). They can have a very significant impact on local and regional populations, which is why this type of project, which has obtained 13% of programmable funds (€ 310 millions) since 1986, is tending to multiply (18% of commitments in 1999-2000).

N IGER ’ S FAMINE CRISES MAY RETREAT INTO HISTORY

Thanks to a € 40 million investment in the Tarka Valley irrigation project, Niger’s famine crises may become a problem of the past.

The Tarka valley, with its 500 sqkm of fertile soils and underlying water reserves, could become the grain silo of Niger’s Madaoua and Bouza agglomerations. It is to unlock this potential that the Commission has over the past 11 years provided experts and funds to terrace the valley’s land and develop its irrigation. Farmers and technical staff have been trained, and rural credit systems have been set up to encourage local ventures.

Since 1992, the region’s agricultural production has practically doubled.

Today, the valley’s 27,588 ha of terraced land produce 26,600 tonnes of onions, 1,800 tonnes of cauliflower and 430 tonnes of cereals every year. One part of the produce is stored in banks, while the other is sold on the market. Onion sale profits alone have climbered over the past few years from 2,17 billion CFA to more than 3,22 billion CFA.

By making food production independent of climatic variations, the Commission has increased not only the incomes but also the food security of 160 000 Nigerians.

Animal farming

Aid has traditionally concentrated on sedentary farmers. It is now changing with recognition of the role played by semi-nomadic animal farming populations and their relations with their sedentary neighbours. For this reason support for animal farming has been increasing significantly, and has now reached € 234 million between 1986 and 2000.

2000 saw the closing of the major pan-African campaign against cattle plague and the launch of two programmes against the most widespread and serious infectious diseases.

These two regional programmes represent a total commitment in excess of € 83 million.

In southern Africa (Malawi, Mozambique,

Zambia and Zimbabwe), a programme to combat infectious diseases (tsetse and trypanosomiasis) is also entering its final stage, after more than 15 years of activity.

Other animal health projects at the finalisation stage will shortly be evaluated.

Micro-projects and decentralised cooperation

These relatively recent approaches express the growing desire to co-operate directly with development aid beneficiaries. Most of these are the poorest rural or sub-urban populations, representing between 50% and 90% of the inhabitants of the various ACP countries. The farming sector partners and contractors for these financing projects are local groupings, associations or cooperatives. These are local, relatively inexpensive initiatives, with set timeframes and not requiring complex technology. This form of aid (€ 87 million) represented 12% of the EDF in 1999-2000 as against 4% in 1986-2000. This increase relates to actions targeted at agriculture, with most financing projects directed at rural social infrastructures (education, health).

SMEs and cooperatives

This support (€ 79 million), which is close to decentralised co-operation, is aimed at small and medium-sized enterprises or cooperatives, which are generally unprepared to launch into productive development or to benefit significantly from external credit.

This financial instrument, has, however, limited application in the agricultural sector, relating as it does, essentially, to micro-credits and having only a small overall impact on development. Nonetheless, the example of at times highly successful micro-finance operations – in Burkina Faso, Guinea and non-ACP countries (Bangladesh) – could give a new impulse to this strategy.

Crop and animal farming research

European aid to this type of project has grown very substantially. Over 43% of the financial aid granted between 1986 and 2000 was committed in 1999/2000. In 2000, substantial new financing was made available to agricultural research, as part of a rethought overall strategy and an intervention methodology adapted to the current context.

At regional level

The greater part of the budget is allotted to two regional projects: the Regional Support to Agricultural Research in East Africa project (€ 29 million), a part of the Association for Strengthening Agricultural Research in Eastern and Central Africa (ASARECA) and the Support Programme to Agricultural Research in West Africa (€ 12 million), which is part of the West and Central African Council for Agricultural Research and Development (WECARD).

These projects are seeking to organise and enhance the regional dimension of agricultural research starting from national research systems. This strategy involves various forms of financing:

• institutional support;

• support to regional research networks and centres, as part of co-ordinated

activities directed at major research topics;

• an innovative mechanism of incentive-based, competitive funds open to

national research systems.

At national level, the Agricultural / Livestock Research Support Programme (€ 8.3 million) being carried out in Kenya received a positive mid-way evaluation. Preparatory work has begun on the Support to the Agricultural Research in Niger project, with an indicative amount of € 6.4 million. Direct support to national research centres has been almost entirely abandoned in favour of a regional approach.

At international level, support for the Consultative Group on International Agricultural Research has been directed towards subjects which benefit from an international approach to research (genetic improvement, bio-diversity preservation and management, international political dimension).

M ANAGEMENT OF CROP AND FALLOW LAND

How can management of fallow land in Western Africa be improved? This is a fundamental problem given that, in this part of the continent, the reduction of fallow land has led to a reduction in soil fertility and to environmental degradation.

In its initial phase, the managers of the Fallow Lands project, which is being undertaken in cooperation with the France’s Institut de Recherche et de Développement (IRD), which has many years’ experience in this area, have sought to bring together all the available skills and to incorporate the results of operations carried out in various countries and in different soils. Earlier projects have provided valuable lessons:* regeneration of degraded soils in Burkina Faso, management and regeneration of dry sandy zones in the Niger, the enrichment of natural fallow land with fruit trees in Senegal, management of planted fallow land (in particular cocoa trees) in the Ivory Coast. All these experiments share a common concern: that of situating the entire research problem in a joint context of “crop and fallow land systems”. The initial results are now available .

The new EDF programme is seeking to ensure the continuity of its research activities.

The concern here, is to introduce the techniques that are most promising in a rural environment, taking advantage of existing development projects for improving rural areas.

*In a series of high-quality publications, which are synthesised in "Jachère en Afrique tropicale - De la jachère naturelle à la jachère améliorée - le point des connaissances", published jointly by IRP/John Libbey, volume 2 of which has just been published in April 2001.

Integrated programmes

Integrated, or multi-sectoral, programmes are the rural development instrument which have attracted the largest volume of funding, amounting to € 925 million, equal to 39% of the resources of the last three EDFs. This sum has been divided between 136 projects. These programmes, of the order of € 10 to 50 millions per selected development zone, each cover a substantial rural zone in an ACP country.

This type of intervention has proven highly complex and has given way to decentralised or more specific forms of support. The level of commitments for the three programmes committed during the two years 1999-2000 has therefore fallen from 39% to 9%.

The sole Action Plan for Farming Reorganisation in Burkina Faso maintains the dynamism of the earlier projects. This programme has four parts: professional agricultural organisations, rural financing, developing the rice production and marketing chain, plus an institutional support programme.

P ROGRAMA DE D ESAROLLO R URAL I NTEGRADO DE LA L INEA N OROESTE – PROLINO

The Dominican Republic has experienced impressive rates of economic growth in recent years. However, the marginal rural areas of the country away from the irrigated valleys have benefited little from this growth. To address this gap, a multi-sectoral project (the "Programme for the Rural Development of the North-Western Border Region” - PROLINO") was funded by the European Union covering 4 provinces in the northwest. The aim of the project, worth € 23 million, was to improve rural infrastructure, services and incomes while protecting the environment.

This project experienced success in three main areas:

Measurable positive impact, with concrete achievements including:

– Building 102 km of roads, and 1 river bridge benefiting more than 2,400 families

– Constructing or refurbishing 7 clinics serving 1 500 families

– Installing and rehabilitating 43 irrigation systems for 300 families

– Providing more than € 400,000 of agricultural credit to more than 500 families,

– Reforestation with over 1,5 million successfully planted trees and water basin management

– Distribution of some 6,000 gas stoves replacing half of the wood stoves.

Introducing innovative ideas to the people and institutions involved. For example, a transparent contracting process was a new idea in these regions, and the fact that the systems helped establish a 100 % completion record for all works contracted gave a strong message in support of the fight against corruption. The communities were involved at all stages of the programmes and an innovative approach was taken with the beneficiaries/actors paying cash contributions for the different programmes. This system helped to secure their commitment to and responsibility for the investments. (as no household received a gas stove that was not really wanted, nor had a solar panel installed that was not considered a priority) and also provided a strong incentive for beneficiaries to manage and maintain the aqueducts, hand pumps and wells properly.

Activities involving NGOs included a micro-credit programme and the distribution of gas stoves. By careful selection of NGOs the project was able to overcome the problem of the rural population viewing investments by government projects as handouts. Of the 7,500 households who received gas stoves, not one defaulted on re-payments. Repayments of micro-credit to the NGOs were in all instances better than 95 %, and in two of the five NGOs, were 100 %. Local government councils, NGOs, government agencies (such as the Water Board) and community groups were provided with training and practical experience of identifying, implementing, managing and evaluating projects to ensure that all activities were both well-maintained and sustainable.

Developing capabilities through including a training element in every programme. This was essential to develop the capabilities of the rural poor. This capacity building at village group level has ensured that the villagers can manage the new infrastructure and techniques as well as being able to contribute more to future development in the region.

Fisheries

The Community activities in fisheries co-operation policy are centered on poverty reduction and sustainable development. Fisheries in Lake Victoria play a vital economic and social role. An EU research project for managing the Lake’s resources is now in its second phase of operation. It will spend € 8.4 million on developing an urgently needed comprehensive resource management plan for the Lake, in co-ordination with a regional organisation and other donors. This project also aims to strengthen the institutions involved in fisheries management in ACP countries. It will foster regional co-operation and enable the development of fish typology and new quality databases for fishery management.

The EC also has ongoing interventions in this field in the Pacific, Indian Ocean, Southern and Western Africa and the Caribbean. Another priority area for Community intervention is the strengthening of sanitary control aspects in ACP countries. A new 30 million programme was launched during 2000 and is expected to become operational by the end of 2001.

2.6. Environment

Sustainable development, an essential part of overall development, is one of the Union’s priorities. Basic strategies include protecting, maximising the potential of and safeguarding natural resources, re-establishing ecological balances, and halting land and forest degradation.

The need for an integrated environmental policy, and the impact of such a policy on vital questions such as self-sufficiency and food security, has not escaped the Commission. With this in mind EDF financing has, between 1985 and 2000, supported programmes in three main directions:

– environmental policies/institutional support

– biodiversity

– in situ conservation.

In all, 181 projects totalling € 244 million have been committed, 51 are still ongoing.

The dividing up of support between these different directions seeks to balance sectoral, political and institutional support, as well as the in situ actions, with the objectives of conservation and biodiversity.

This share on support is proceeding with 24 new projects amounting to € 63 million.

A global evaluation of the Community’s environmental actions between 1990 and 1995, published in 1998, as well as more specific evaluations, give, as a whole, a positive assessment of the impact and relevance of these projects and programmes. The shortcomings mentioned are insufficient integration into consistent national policies, a still insufficient appropriation of the ensuing benefits by the entities entitled to expect them, and a certain operational fragmentation.

On the other hand, the new commitments confirm a trend towards more substantial programmes, and support for programmes integrating both sectoral and/or institutional support, and support for in situ conservation (see box) and rural development. The regional dimension takes on a particular importance in these two precise cases.

P RESERVING C ENTRAL A FRICAN E COSYSTEMS

Central Africa possesses one of the world’s richest ecosystems in terms of biodiversity, including the world’s second largest forest mass after the Amazon. The established equilibrium is under threat today from an inadequately controlled exploitation of timber resources and of animal species, threatening them with extinction in the long term. For this reason the Central African countries signed in 1992 the Convention on Biological Diversity, as well as various international agreements seeking to achieve a sustainable management of plant and animal resources.

In 1992 again, six States (Cameroon, Congo, Central African Republic, Gabon, Equatorial Guinea and Sao Tomé and Principe) , faced with common environmental problems, launched the ECOFAC (Forest Ecosystems in Central Africa) programme.

With EU support, the first stages of the programme (1992-2000) have enabled most of the infrastructures to be put in place, and 28 000 sqkm to be managed and conserved. In association with the local populations, the first concrete initiatives have been launched (rural development, social actions, eco-tourism, joint infrastructures, etc.) together with training, awareness-raising and research aimed at increasing knowledge of the region’s ecosystems.

T HE I SLAND R EGION OF P APUA N EW G UINEA

Over 85% of the population of Papua New Guinea (PNG) lives in rural areas where the land is owned by clans. 70% of these areas, which are rich in natural resources, are covered with forests. In order to make local communities more aware of the importance of the sustainable use of the country’s forestry resources and at the same time conserve areas of great biodiversity, the government started the ‘Island Region Environmental and Community Development Programme’ 48 . The programme, co-funded by the European Community, got under way in 1995, with a budget of € 5 million for five years, focusing initially on the island of New Britain.

126 The programme has emphasised support for small-scale community initiatives. Small “walkabout sawmills” have been introduced, with production levels compatible with sustainable forestry management. These operate from six regional offices in seven provinces. Over 25 such operations have been set up, and their success is all the greater inasmuch as they combine the dimension of environmental concern with a spirit of entrepreneurship.

An evaluation of this project conducted at the end of 2000 came to very positive conclusions. This initiative has favoured the development of community forestry management at the local level, which is making a significant contribution to the programme’s objective of sustainable management. Specific training for forestry workers has proved very fruitful.

This example, by demonstrating that real alternatives exist to deforestation and the degrading of forests, has had a multiplier effect in Papua New Guinea and the South Pacific region. In view of the immensity of the task, a new eco-forestry programme (funded by EDF to the tune of € 7.5 millions) has been added to the initial programme for a five year period. In particular, it should make it possible to integrate training into regular programmes, to develop marketing and gradually to transfer responsibilities to local organisations (local government organisations, non-governmental organisations and the private sector).

Forests/Management and exploitation

Between 1985 and 2000 the Commission’s “forestry” strategy has focused on three areas:

• Forestry policy and support to administrations: Some thirty projects, worth around €

44 million, 30% of which have still to be committed.

• Forest development: Various actions, like the creation of forest blocks, and forest

protection and/or improvement. This category contains some 40 projects worth € 144

million.

• Forestry services: The 12 specific projects, totalling € 37 million euros, are almost

entirely committed.

In addition to the various projects committed to since 1985 (see box), five new initiatives, under the heading “support for forestry policies and institutions” have been supported with around € 23 million. Added to the 14 earlier projects of the same type, this represents in all 19 projects with a value of € 38 million emanating from the EDF.

This evolution points to a triple trend:

• a very clear reduction of “development/reforestation” type actions.

• reduction of one-off “research” and “training/education” activities,

• refocusing on more sectoral, political and institutional support, with a view to

promoting a more consistent and holistic approach to the sub-sector. This approach should permit the better design and implementation of major protection, restoration

and sustainable exploitation initiatives.

M ANAGING AND CONSERVING U GANDA ’ S FORESTS

Timber is scarce

Uganda is running out of timber resources. There is a clear and urgent need for plantationsourced timber to meet growing demand. Biodiversity conservation of key forest areas, sustainable forest production, and the creation of new sawlog resources, are three key features of Uganda’s new forest management programme, designed to reduce the pressures on its natural forests.

A new Forest Resources Management and Conservation Programme (FRM&CP) must carefully find a way to co-ordinate the needs of forest conservation with those of sustainable forest management. It must also involve the local communities who are trying to make their living from forest resources, and accommodate private sector developers who run compensatory timber plantations.

The FRM&CP will seek to contribute to poverty alleviation through programme activities and the supply of goods and services by forest areas to adjacent rural communities.

The programme will strengthen the technical skills base of the Forestry Department/National Forest Authority, and will encourage the private sector to participate in the sustainable economic management of natural forests and the creation of timber plantations. It will also promote efficient use of existing sawlog resources by pitsawyers and sawmillers.

New standards and guidelines will be formulated to ensure that best practice is adopted which may allow forest owners in Uganda to obtain certification for their forests, thereby gaining access to international funds which are linked to certification standards.

Under new management

In the long run the Forestry Department is due to disappear, to be replaced by a National Forest Authority (NFA) which will run up to five of the new Forest Management Areas covering 14 key districts with forests classified as of ‘core’ and ‘prime’ conservation value. While the NFA is being set up, its EDF funds will be used to meet the local staff costs in full for its first year , but thereafter those costs will have to be taken up progressively by the NFA itself.

It is essential to arrest deforestation within the forest reserves, and improve the management of their conservation and sustainable development. There will be a sharper focus than before on key forest areas. The proposals for sustainable management , which could cover up to 40 villages with a total population exceeding 20,000 people living in the area are covered by the new programme. The situation will be reviewed every two years, once the FRM&CP has effectively started.

The total cost of this five-year programme, including contingencies and an allowance for

inflation, is €13,17 million. €12 million will come in the form of a grant from the 8 th EDF and

€1,17 million has been pledged by the Government of Uganda.

2.7. Transport and Infrastructures

Transport

The Commission’s objectives for co-operation in the area of transport infrastructures involve:

• opening up of countries both internally and to the outside world;

• cutting transport costs and having ACP countries take over recurrent maintenance

costs;

• improving competitiveness by granting management licenses (ports, airports and

railways) and by using the private sector for maintenance work (road sector);

• modernisation of national administrations through reforms of planning and

supervisory ministries (road sector) and tutelary authorities (ports, airports, railways) .

As part of the national development strategies, actions can take the form of integrated development plans for national transport sectors or regional programmes, investment projects (roads, railways, ports and airports) or again institutional support.

In most cases, these are integrated development projects, ranging from institutional support to physical investments.

For the road sector (one of the most voracious in terms of support), the following items merit particular attention:

• the creation or improved operation of the Road Funds, with real financial autonomy;

• more careful control of vehicles on the road, in particular with regard to authorized

weights and dimensions;

• promotion of and support for SMEs and consulting engineering offices in ACP

countries;

• the creation of road databases;

• improving road user safety;

• limitation of undesirable effects, in particular in the environmental area, thanks to

better development and management practices

Infrastructures

Infrastructures, which cover a wide range of systems and areas linked to several sectors of economic activity, are an essential element of development. Here we find:

• urban projects : treatment of solid and liquid waste, drinking water provision, roads,

public buildings);

• telecommunications and information, including satellite tools (meteorology,

navigation assistance, etc.);

• energy, in its various forms (hydro-electric, thermal and renewable energies),

including transport and distribution;

• mining (geological and mining research, exploitation, aerial surveys, cartography,

etc.);

• water management (inventorising and managing water resources, area management,

storage and distribution infrastructures).

P OST F LOOD R ECONSTRUCTION : INTERVENING WITHOUT DELAY

Torrential rains and two cyclones, Eline and Hudas, struck Mozambique in March 2000, provoking major damage. The government presented a Reconstruction Programme in which the Commission decided to participate with € 67 millions. Part of this contribution (€ 20 million) is concentrated in the province of Gaza. The objectives here are very precise: protecting the region from flooding of the Limpopo River and restoring the urban roadways, water networks and waste disposal infrastructures of the cities of Xai Xai and Chokwe.

A N URBAN DEVELOPMENT PROJECT IN S OUTH A FRICA : T HE CASE OF C ATO M ANOR

Cato Manor is strategically located 7 km away from the city-centre of Durban, South Africa. It covers an area of 2, 000 ha. For almost a century, Cato Manor had been a melting pot of Indian and African cultures. Serveing as a buffer zone between the city-centre and the surrounding black rural communities.

In the early 1990s, there was a general move toward post-apartheid urban reconstruction and reconciliation. And the Cato Manor district was identified as a prime development opportunity. After its creation in 1993, the Cato Manor Development Association (CMDA) secured substantial development funding from the EU, and also from local, provincial and central Government. So far, it has invested about €50 million. The EU concentrated its actions in four areas:

• providing key infrastructure such as schools, community halls, a library, a health centre, new

roads, and industrial workshops for emerging businesses. Most of these construction projects

have been completed.

• providing small housing loans to finance easier access to housing. People were allowed to use

these to build on additional rooms, or to top up their current housing loans.

• improving the employment prospects of Cato Manor residents by offering practical vocational

training courses to people who are interested. Twenty light-industry workshops will be handed over to local businessmen for their commercial activities providing services and jobs.

They also will receive management training and marketing support.

• training CMDA staff in their assignment duties, in order to raise their output.

It should be possible to apply the solutions found for Cato Manor elsewhere. The European Commission hopes that its contribution will be a lasting reminder of the long-term benefits that come from finding the right response to the challenges of providing equitable urban growth in South Africa.

More information is on the website: www.cmda.org.za .

2.8. Horizontal policies

European initiative for democracy and human rights

Operations in these regions are supporting potentially complementary programmes and reinforcing initiatives funded by other development co-operation instruments, such as those used in the national indicative programmes. A budget of € 18 649 000 has been made set aside for this purpose.

Here we find expressed the global EIDHR strategy of promoting the rule of law and good public governance, strengthening civil society organisations, protecting minorities and vulnerable groups, equality between men and women, preventing conflicts, and free and fair elections.

WAR CHILDREN IN SIERRA LEONE

The UNICEF programme for “reintegrating children enrolled in the Sierra Leone armed forces into their communities” seeks to look after and protect over 10 000 “child soldiers”, and to allow them return to their families, along with other people separated from them by the conflict . This initiative, to which the EC is giving € 2 millions, is in response to the Convention on Children’s Rights, and other international human rights instruments, in particular the provisions relating to enrolment into armed forces. Through the child protection network, UNICEF is supporting several services working towards this objective: searching for missing persons and family reunification, temporary emergency care, basic social services to communities to facilitate reintegration, psychosocial assistance for children within their families, support for awareness-raising campaigns, mobilising communities to the need to protect children, etc.

The project also provides support of various kinds to strengthen the capacities of the Ministry of Social Welfare, Gender and Children’s Affairs, as well as the participating NGOs.

Human rights specialists

Human Rights are part of the corpus of law. They have their own complexity and merit having their specialists. 26 students from 14 African countries are therefore taking part in a Master’s in Human Rights and Democratisation programme which is emphasising a regional approach to training in this area. The project brings together the Centre for Human Rights of the University of Pretoria, Makerere University (Uganda), the University of the Western Cape and the University of Ghana. Students first spend six months at the Centre for Human Rights in Pretoria where they attend lectures by highly qualified teaching staff. After this they divide up between four universities taking part in the project, where the take courses, carry out placements and write their dissertations.

FREER ELECTIONS IN SOUTHERN AFRICA

Adapting constitutions, legislation and practice to democratic choice. This is the objective of a regional programme organised by the EISA (Electoral Institute of Southern Africa). This project, which has received € 622 000 of support, sets out to strengthen electoral capacities in Southern Africa. The SADC (Southern Africa Development Community) electoral commissions and civil society organisations are directly involved.

Drugs

Caribbean: combating laundering

The Caribbean Anti-Money Laundering Programme (CALP), was started at the end of 1999. It will last five years. It is funded by the Community, the United Kingdom and the United States, and is the main element of the Barbados Action Plan. It responds to precisely targeted objectives (see insert).

Since CALP was launched, all the countries that are members of CARIFORUM* have benefited from legal aid and help in introducing laws against money laundering. Training in handling money laundering-related inquiries and offences has been given to several hundred police and customs officers and justice or interior ministry officials. Conferences and seminars have been organised for staff in banks (in national and off-shore contexts) and other financial organisations, to help them to identify suspicious financial movements and unusual commercial transactions. Magistrates, judges and officials from public prosecutors’ offices have also received various kinds of legal training in this area.

The programme also allows CALP counsellors to give direct help during inquiries on complex cases.

• * 

  Antigua & Barbuda, the Bahamas, Barbados, Belize, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Surinam, Trinidad & Tobago, European Union.

Gender issues

As in any other region in the world, equality of chances is a major factor in EC assistance. A specific example funded by the thematic budget line « Gender »is given in the box below

R EPUBLIC OF G UINEA : THE GIGED STRATEGY

To increase equal opportunity between men and women, the GIGED (Groupe Inter Projets Genre et Développement) is systematically integrating the “gender” approach in co-operation programmes and projects between the Republic of Guinea and the EU.

In spite of its modest resources 49 , the pilot phase has already made it possible, among other things, to set up of a human resources network with a central support team, which is sensitising projects to this objective and engendering support actions.

The GIGED II and III projects are following the same approach. The most significant impacts are the validation of the “gender” approach as a direction of development at the national level, the setting up of a network of national capacities (institutions, development players) and the implementation of good practices. The GIGED strategy, pioneered in Guinea, has since been applied in Madagascar.

Food security

Ethiopia

The major food crisis experienced by Ethiopia mobilised donors. 800,000 tons of aid (more than half of it funded by the EC) was brought in, mostly by the World Food Programme (WFP), NGOs and the EuronAid collective. Interventions by ECHO (European Commission Humanitarian Office) were targeted on the Ogaden area.

The contribution to the food security programme, which represented a significant share in global EC assistance, responded both to the urgency of the crisis and to the need for long term support in the field of food security. The overall cost of this action amounted to € 40 million.

Initial direct aid made it possible to fund 10,000 tons of cereals (€ 27.5 million), purchased on local markets, destined for the Ethiopian government’s strategic reserve. This part of the programme also included support for directing and controlling distribution of this aid, to make sure it really reached the target groups.

The second part involved funding actions to support food security and highly labourintensive work, to the tune of € 11 million. This initiative was aimed at Amhara and Tigray, the two regions particularly affected by the drought.

Otherwise, € 1.5 million were earmarked to assess the programme and to support the country’s institutional capabilities, particularly to formulate and revise national and regional food security strategies in Ethiopia.

49 The pilot phase received € 31 000 from the “Gender” budget heading. Subsequent stages have

received € 510 000 out of the 8th EDF’s National Indicative Programme (NIP) for Guinea.

Eritrea

Ever since 1988, Eritrea has been facing a permanent food crisis caused by the armed conflict with Ethiopia and worsened by persistent droughts. In 2000, there were about 1.1 million displaced persons in the country. Nearly twice this number were in a situation of severe food insecurity.

To complete the EDF support programme and the interventions of ECHO and the WFP, the EU started a € 15 million food security programme, including a currency facility of € 10 million to help import produce. The counterpart funds (local currency funds derived from the sale of this hard currency) generated in this way will be earmarked for a programme to support vulnerable groups. This programme will target farming (particularly via land resources and getting farming going again) and social protection (contribution to the Eritrean Fund for Community Development, Health, Education and Water Supply).

Furthermore, direct food aid of about 16,000 tons (€ 4 million) will be granted to the government for distribution to displaced persons and people suffering from the drought.

Lastly, the programme includes the funding of technical assistance in situ and a feasibility study to define the support to be given to the food security information system.

C APE V ERDE I SLANDS : S OCIAL AND E CONOMIC O BJECTIVES

A multi-annual programme, started in 1997, aims at helping vulnerable families and accompanying the process of liberalisation in the food sector. Community aid is granted in the form of currency facilities to support the balance of payments. The counterpart funds generated by the sale of the currencies are targeted on a small number of areas. In 1997 and 1998, support was given, in particular, to high labour-intensive programmes (so-called “FAIMOs”), in order to improve project viability at township level and the promotion of income-generating activities.

Since 1998, another element of the programme has been to restructure EMPA (a public company for the supply and marketing of basic food products) with a view to its privatisation, which is one of the government’s objectives for 2001.

Lastly, a financial contribution was made for minimum social security pensions and to the Cape Verde Islands Solidarity Institute between 1998 and 2000.

Humanitarian Aid

ECHO has been very active in ACP countries during the year. The table below shows the financial decisions on Humanitarian Aid for the region.

FINANCIAL DECISIONS FOR HUMANITARIAN AID

BY REGION IN 2000 (ECHO)

AFRICA, CARIBBEAN, PACIFIC DECISIONS IN € Million

TOTAL 170.178

Angola 15.768 Belize 0.850 Burundi 13.780 Chad/Niger 1.200 Comoros 2.175 Congo (Democratic Republic) 20.000 Congo (Republic) 3.000 ECHO Flight 8.800 Ethiopia/Eritrea 22.495 Kenya 4.440 Uganda 0.810 Madagascar 1.610 Mauritania 0.365 Mozambique 9.680 Other Island Countries/Territories 0.200 Sierra Leone/Guinea/Liberia 16.137 Somalia 6.518 Sudan 11.000 Tanzania 26.850 Zambia/Namibia 4.500

2.9. European Investment Bank (E.I.B.)

The European Investment Bank has financed ACP countries and territories with € 401 million, as detailed in the following share :

REGION € MILLION

135

Africa 245,5

Caribbean 76,7

Pacific 3

PTOM 7

Others 18.8

TOTAL 401

2.10. Perspectives

The latest ACP-EU agreement allows regular review of support strategies and therefore allows flexibility including allocation of resources which will be calculated on an assessment of need and policy performance. It is clear that the partner countries should play a lead role and so Community development assistance will seek to place resources in their hands. Larger scale interventions should increase impact and make co-operation with other donors easier and more effective. All of the EFD s can now be consolidated which means one clear programme rather than parallel programming and initiatives. Finally assistance will be decided in liaison with actors at all levels of society in partner countries to avoid allocations of funds outside the basic principles of the Cotonou Agreement.

ACP COUNTRIES

AFRICAN CARIBBEAN PACIFIC OVERSEAS

COUNTRIES &

TERRITORIES

Angola Antigua and Barbuda Cook Islands Mayotte

Benin Bahamas Fiji New Caledonia

Botswana Belize Kiribati Pitcairn Island

Burundi Barbados Marshall Islands French Polynesia

Burkina Faso Cuba* Micronesia Wallis and Futuna

Cape-Verde Dominica Nauru Islands

Central African Republic Dominican Republic Niue Netherlands Antilles Chad Guyana Palau Aruba Comoros Haïti Papua New Guinea Anguilla Congo Grenada Solomon Islands British Virgin Islands Cameroon Jamaica Samoa Montserrat Democratic Republic of St Kitts and Nevis Tonga Turks & Caicos Congo St Lucia Tuvalu St Pierre and Miquelon Djibouti St Vincent and the Vanuatu

Equatorial Guinea Grenadines

Eritrea Sâo Tome e Principe

Ethiopia Trinidad and Tobago

Gabon * Cuba was admitted as

Gambia a new member of the ACP group in

Ghana December 2000, but is not a signatory of the

Guinea Cotonou Agreement

Guinea Bissau

Guyana

Ivory Coast

Kenya

Lesotho

Liberia

Madagascar

Malawi

Mali

Mauritania

Mauritius

Mozambique

Namibia

Niger

Nigeria

Rwanda

Senegal

Seychelles

Sierra Leone

Somalia

South Africa

Sudan

Swaziland

Tanzania

Togo

Uganda

Zambia

Zimbabwe

VII Asia

The European Union first defined the overall strategy governing its

relations with Asia 50 in 1994. But the world has moved on since then, with

significant economic and political changes in both Asia and the EU. The accelerating pace of globalisation has opened up more opportunities, but also posed greater challenges. Unfinished business remains: the full potential of economic relationships between Europe and Asia has not yet been realised. Europe must strengthen its political engagement with Asia, and convert its current dialogues into stronger partnerships.

The 1994 Commission Communication Towards a New Asia Strategy covered the countries of South, South-East and North-East Asia. It highlighted the rapid economic changes that had taken place in the region over the previous decades, and argued for a guaranteed EU presence in the region that would be effective and proactive. The key strategic objectives in 1994 had been:

ASEAN

Brunei, Burma / Myanmar, • strengthening existing bilateral relations;

Cambodia, Indonesia, Lao

PDR, Malaysia, Philippines, • raising the EU’s profile in Asia;

Singapore, Thailand,

Vietnam • supporting regional co-operation in the interests of peace

and stability;

SAARC

Bangladesh, Bhutan, India, • supporting the conversion of state economies to free Maldives, Nepal, Pakistan, market systems;

Sri Lanka • ensuring open markets and a non-discriminatory business

Other Countries and framework;

Regions

Afghanistan, China, East • working for sustainable development and poverty Timor, Hong Kong, North alleviation in the least prosperous countries;

Korea, Macao* • encouraging the Asian region to play a more prominent

• * 

  Yemen, Iran, Iraq and role in international debate;

Gulf countries are dealt

with in the Mediterranean • ensuring a co-ordinated approach across all EU Member

section States in their relations with Asia.

After 1994, these objectives were refined in further country-specific and sector-oriented strategies, published in several more targeted Communications 51 . These were concerned

50 Commission Communication Towards a New Asia Srategy (COM(94)314 i of 13 July 1994).

51 For example: A long-term policy for China-Europe Relations (COM(95) 279 i of 5 July 1995), EU-

India Enhanced Partnership (COM(96) 275 i of 25 June 1996), Creating a New Dynamic in ASEAN-EU Relations (COM(96) 314 i of 3 July 1996), Europe-Asia Co-operation Strategy for

with formalising EU’s relations with China, India, ASEAN (the Association of South East Asian Nations), Indonesia, and the process of Asia Europe Meetings (ASEM). The sectors of energy and environment were also singled out for attention.

In 2000, the Commission undertook preparatory work to update the EU’s Asia strategy. A Communication entitled “Europe and Asia: A Strategic Framework for Enhanced Partnerships 52 ”, outlining the main avenues of co-operation for the next decade was to be adopted in 2001.

1. EC CO - OPERATION WITH DEVELOPING COUNTRIES IN A SIA

The European Community’s co-operation assistance to Asia has been growing at a moderate pace over recent years, rising from €363 million annually in 1991-1995 to an average of €438million per year in 1996-2000. The focus has changed significantly. Today more than 80% of EC development aid earmarked for Asia goes to low-income countries. For the more advanced countries in the region, new programmes for win-win economic co-operation have been introduced that are particularly attractive. Taking EC and Member State’s aid activities together, EU aid continues to account for 30% of the total overseas development aid (ODA) flows to Asia 53 . This is less than Japan (51%) but well ahead of the US (9%).

Priority fields for past co-operation have included: rural development; institutional capacity building; health and education. In 2000, health and education were again the primary focus of the EC’s strategy in the fight against poverty.

Budget commitments and spending

All programmes for Asia spent close to their budget limits in 2000 (see table). Payment credits for technical and financial co-operation needed a special reinforcement of more than €40 million during the year. Special attention was paid in 2000 to reducing delays in payment, with the result that the Commission services succeeded in liquidating all payments within the legal deadline of 60 days.

The significant concentration of commitments in large programmes confirms the agreed trend to move from financing small individual projects to supporting large programmes, particularly in social development sectors such as health and education. For instance, a single education programme in India (€200 million) accounted for 65% of the entire allocation of that portion of the 2000 budget.

Energy (COM(96) 308 i of 18 July 1996), The EU and Hong Kong : beyond 1997 (COM(97) 171 i of 23 April 1997), Perspectives and Priorities for the ASEM Process (SEC(97) 1239 of 26 June 1997), Europe-Asia Co-operation Strategy in the field of the Environment (COM(97) 490 i of 13 October 1997), Building a comprehensive partnership with China (COM(98) 181 i of 25 March 1998), The EU and Macau : beyond 2000 (COM(99) 484 i of 12 November 1999), Developing Closer Relations between Indonesia and the EU (COM(00) 50 i of 2 February 2000), Perspectives

and Priorities for the ASEM Process into the New Decade (COM(00) 241 i of 18 April 2000).

52 COM(2001)469 final i.

53 This can be compared with an EU share of 47.5% of ODA flows world-wide, against 27.2% for

Japan, and 16.2% for the USA.

EU funds for Asia in 2000

COMMITMENTS PAYMENTS

Available Used Available Used

(€'000) (€'000) % (€'000) (€'000) %

Technical & financial co-operation 315 927 305 225 97 253 861 253 216 100

Economic co-operation 115 640 113 785 98 30 380 28 193 93

Refugees* 39 583 39 403 97 19 593 17 415 89

Rehabilitation* 3 910 3 810 97 17 808 15 437 87

Rehabilitation in East Timor* 20 000 19 950 99.5 10 900 9 100 83

TOTAL 495 060 482173 97 332 542 323 361 97

• * 

  Managed as thematic actions

Poverty reduction – a priority

The main EU assistance in Asia has been focused on direct poverty reduction measures, for example through support for rural development, support for infrastructure and institutional capacity building. The environment sector has also received support with substantial programmes devoted to areas such as forest protection, biodiversity and environmental technology. The health and education sectors, which have recently become a targeted priority for our co-operation in terms of equity and quality of care, as well as enhanced education also feature significantly in EU efforts aimed at poverty reduction. Priority is given to the poorest populations, and to the poorer areas of developing countries, with a view to supporting economic activities that lead to sustainable development.

The EC supports human resource development programmes because it has found, from experience, that this support is essential to ensure the sustainability of its projects. The training given to people in local communities is also useful to officials in national and local governments.

Work continued on 56 projects in 2000 for South Asia, South-East Asia and China. Nine new projects (€101 million) were started, and six new financing agreements were signed for a total of €83 million):

2. R URAL DEVELOPMENT AND E NVIRONMENT

• In rural development, the focus is on raising levels of production, both in quantity

and quality, and on improving marketing capability. EC-supported projects often cover an additional wide range of associated activities, such as health and education. For each project, right from the initial planning stage, the Commission encourages local people to join in and thereby feel a sense of ownership. Such joint responsibility

is also a sure way to improve project success rates. Large-scale projects have included the construction of major canals for irrigation and water supplies, embankments for coastal protection, new rural roads and bridges. Roads are crucial to remote rural populations, who need them to get their agricultural produce to market in good time and to be reached themselves by social services.

• In the environment sector, the Commission supports the protection and maintenance

of tropical forests. There are major programmes especially in Indonesia and the Philippines, where natural resources are rapidly degrading. Other projects are helping to deal with industrial and urban environmental problems, where increased industrial production and domestic consumption not only cause serious air and water pollution, but also contaminate the soil. The EC has a particularly active industrial and urban

environmental co-operation programme with China.

Project management

Most projects in the rural development and environmental sectors are managed jointly by European technical assistance experts and local representatives. A project management unit is usually set up within the main national department responsible for the project. One benefit of this system is the transfer of management skills to the local authorities. Rural development, and forestry projects involving rural populations, usually require long time spans to make any substantial progress. They often take longer than five years to complete. After starting as local undertakings, agricultural projects are sometimes extended so that their economic impact may be felt at regional level. This has been particularly the case with projects for controlling disease in livestock, and also the development of agricultural micro-projects.

A GRARIAN REFORM IN THE P HILIPPINES TO REDUCE POVERTY

The Philippine Government has adopted CARP, a Comprehensive Agrarian Reform Programme designed to increase agricultural productivity and improve farm income by transferring around 8 million hectares of public and private agricultural land to 4 300 000 landless farmers. To date, CARP has distributed approximately 60% of the land to over 3 million farmers.

Adopting a community-based approach, the government also provided a package of support services to the farmers to help them become successful producers and entrepreneurs. They include the provision of modern agricultural technology, training, credit lines and marketing advice. This is called the Agrarian Reform Community (ARC) approach.

The EC became the first foreign donor to support a project designed on the ARC model. In 1995 it started the Agrarian Reform Support Project which covers 63 ARCs in five provinces. It also provides direct technical assistance for making land surveys to facilitate the land distribution process.

This agrarian reform model has been copied by many other donor-supported projects, including those funded by EU Member States. The Department of Agrarian Reform is using the lessons learned from their implementation to refine strategy, to document best practices, and to assess their impact on poverty.

The EC renewed its commitment to the agrarian reform in 2000 by signing a second project, due to start in mid-2001. This will cover 50 ARCs in four provinces in Muslim Mindanao.

3. I NSTITUTIONAL STRENGTHENING

Working to achieve transparent and accountable governance in Asia is at the top of the EU assistance agenda. The focus is on developing effective public and semi-public institutional administrations. Priority has also been given to strengthening the rule of law and improving access to justice, while guaranteeing the professionalism and independence of Asia’s judicial systems. The fight continues against bribery, corruption and clientelism.

Specific goals

In the area of Institutional Strengthening:

– The Development of transparent, accountable and effective governance and administration in all public and semi-public institutions.

– The Strengthening of the rule of law and improved access to justice while guaranteeing the professionalism and independence of judicial systems.

– The fight against bribery, corruption and clientelism.

Examples of programmes

Projects are being launched in Indonesia to support good governance (€13.3 million), including a programme providing institutional support to the Attorney General’s Office.

In China, the EU-China Legal and Judicial co-operation programme (€9 million) is successfully underway and is being implemented by the British Council. It is a very demanding project in terms of legal skills and experience.

Also underway is the EC-China training programme on Village Governance. This €14.7 million programme is designed to strengthen the capacity of Civil Affairs Departments at all levels with regard to implementing and popularising the Village Committee Organisational Law.

In Nepal, a renewable energy project (±€15 million) is planned, focused on the installation of photo-voltaic systems in rural areas where no other source of energy is available. This project will involve the strengthening and/or the creation of institutions, centrally as well as in rural areas, to monitor the project at national and local levels

In Bhutan, a programming mission took place to define a project which would be the second phase of the project « Cultivation of Medicinal Plants for Traditional Medecine » which ended in 1999. One of the main objectives of this new project will be to consolidate on a long-term basis the institutional structures set up in Phase I.

4. R EGIONAL CO - OPERATION

Regional integration and co-operation contribute to the integration of Asian countries into the world economy and play a decisive role in consolidating peace and preventing conflict. They enable the countries involved to face cross-border challenges, in many fields including the environment and the use and management of natural resources. In the light of its experience and of the instruments at its disposal, the EU is in a position to support efforts in this direction across the Asian continent.

Specific goals

In the area of Regional Co-operation and Integration:

– The development and strengthening of the capacities of regional institutions -in South Asia principally SAARC ; in South East Asia principally ASEAN- to promote regional co-operation and integration in the areas of political, commercial, economic and financial co-operation.

– The development and strengthening of the capacities of national governments and parliaments in matters of regional co-operation.

Examples of programmes

A new regional programme addressing problems of animal disease due to cross-border movements of livestock is under review for China, Vietnam and Laos, and a new programme in India has been requested.

An integrated pest management programme for cotton crops is in progress in six Asian countries. This programme, which began in November 1999 and which will finish in 2005, is being implemented by the FAO and funded by the EU (€ 12 million). Primarily the problems of pesticide used in cotton and is seeking new approaches to cotton production, and new requests are being examined for Nepal and Bhutan.

5. F OCUS ON THE S OCIAL S ECTORS

5.1. Health

The current trends for EU co-operation in the health sector in Asia show a new emphasis on equity (access for the poor) and quality of care. Priority has been given to these trends when developing health systems and supporting sector reforms. There is now a shift away from small projects to larger-scale sector programmes which also respect these values. The programmes are increasingly being implemented in close co-ordination with other donors (e.g. the World Bank) through sector-wide approaches. In 2000 the EU global allocation was €350 million.

Regional programmes have been set up to address cross-border or common problems, e.g. vector-borne disease, like the Indochina Malaria Control Programme (Laos, Cambodia, Vietnam).

The Commission has responded to international developments such as the UN Cairo/Cairo+5 process 54 on supporting initiatives in the area of sexual and reproductive health.

The Commission believes in a continuum of post-conflict rehabilitation towards development. In the case of East Timor this has been achieved through a sector-wide approach with other donors (World Bank, Portugal, AusAid, Brazil, the Japan International Co-operation Agency), and in close co-ordination within the Commission services.

Examples of EU support for health projects

Asian region

Asia initiative for reproductive health

54 UN International Conference on Population and Development, Cairo, September 1994. Cairo+5

refers to the 1999 five-year review.

The Asia Initiative covers Pakistan, Nepal, Sri Lanka, Bangladesh, Vietnam, Laos and Cambodia. This innovative project is designed to embrace the major recommendations

from the UN Cairo population conference 5 , by working to increase the quality and

accessibility of reproductive and sexual health care in South and South-East Asian countries. Support is given to non-profit private initiatives which work in local communities with the full involvement of the local people. In 2000, an EC grant of €29.9 million was complemented by a national contribution of €5.4 million. The programme is being implemented in partnership with the United Nations Population Fund and a number of non-governmental organisations. The mid-term evaluation, carried out in 2000, concluded that progress towards achieving the programme’s overall objectives is satisfactory.

South Asia

India: Support for Health and Family Welfare sector

Supported by the EC and other donors, the Indian Government is carrying out a special investment programme to reform its Health and Family Welfare sector. The goal is to improve both quality and accessibility of health services in India. The EC contribution in 2000 amounted to €200 million, while India put forward €234 million.

The money is used by central, state and district authorities to help them implement the new reformed system of Family Welfare. As a result, health services are now of better quality, and are reaching more people. The provision of a full range of family welfare services is now cost-effective, including reproductive and child health care. The process is fully monitored, and the feedback in 2000 is that progress is being made towards achieving the programme’s goals. For example, reform bodies have been established, and several implementation plans have been developed at state and district level. Reform of the system of managing drug supplies is continuing.

Bangladesh: Support for Health and Population sector programme

The Health and Population Sector Programme is a sector-wide programme to improve the health status of the people of Bangladesh, particularly the poor. The purpose of the project is to achieve a client-centred provision and appropriate utilisation of essential health services. This requires reform. The Bangladeshi Government will use the EC grant of €70 million, together with other donor assistance, to bring in necessary reforms of the national health sector.

South-East Asia

Philippines: Women’s health and maternity issues

This project is part of the assistance made available by a consortium of donors to the Government of the Philippines to help improve and sustain health care and family conditions. The EC is contributing €17 million, while the national contribution is €2 million. Particular help is given to women living in remote villages, who benefit from improved access to health services and education. Aided by the project, active partnerships are being forged between local communities, non-governmental organisations, local government units and the Health Department. In 2001, a mid-term evaluation concluded that progress was satisfactory: some partnerships have been established, and much has been done to empower women through raising awareness of their special health needs.

5.2. Education

Asia has the most important education portfolio of all regions. It has the lion’s share – about 34% (nearly €600 million) – of the Commission’s total education budget commitments (over €1 750 million). The average size of each of its education programmes is also larger than anywhere else in the world, €33 million, which can be compared to €23.4 million in the Mediterranean region and €8 million in the ACP/Latin America/European (Tacis/Cards) regions. As part of the fight against poverty, 80% of the Asian education portfolio is dedicated to basic education.

The top EC priorities in Asia are the provision of basic education and the reformation of the education sector, particularly to improve access to, and the quality of available education services. Working with NGOs is a commonly used approach, as is inviting the private sector in local communities to become fully involved.

• Basic education 55 is a main entry point for dealing with key development issues such

as poverty reduction and sustained development. In Asia, the focus is on providing quality educational services to disadvantaged groups, with particular attention to girls and young women. Indeed, experience has shown that investing in the basic education of girls has succeeded better than any other sectoral policy to reduce fertility rates, and

also to lower figures for both maternal and infant mortality.

• Sector reform programmes are needed so that each national education sector can

develop in an organised and structured manner, with due regard to the state of the national economy. National governments are encouraged to take over full ownership and responsibility for implementing these reform programmes. The EC support is usually closely co-ordinated with that of other donors, and works to meet the same targets as those set by the governments themselves. Care is taken to support relevant public sector expenditure programmes that form part of an equitable, well-balanced,

and acceptable education policy agenda.

• Access and quality are issues now under the spotlight. There has been a gradual shift

away from supporting ‘hardware’ (e.g. building schools, providing equipment) to supporting ‘software’ (e.g. teacher training, improved teaching and learning materials, capacity-building). The EC approach is, however, flexible: when the local situation demands that buildings should be built, or repaired and equipped, this type of support

is integrated in overall plans to improve educational quality and efficiency.

• Additional support through local NGOs and private operators is one way of

maximising the impact of Commission assistance in the education sector. Using NGO help can be very useful to forge links and create synergy between the formal and nonformal education sectors. Through supporting NGOs, the EC can direct its policy towards strengthening the non-formal education sector, particularly in those countries where NGOs already provide an important share of educational services to a large

proportion of the population.

55 Basic education comprises the following sub-categories and includes all aspects such as teachers,

inspectors, managers, instructional materials etc.: primary education (comprising generally the first cycle of systematic instruction); pre-school education; non formal education (literacy and

numeracy training for the basic life skills for both adults and children).

Examples

Teacher training and education in Pakistan – Second phase

The Aga Khan University Institute for Educational Development has been supported by the EC since 1993 in its objective to help improve the quality, effectiveness, relevance and outreach of education systems in Pakistan. The EC is contributing €10 million towards the total project cost of €22.8 million under the current phase, which is scheduled for completion in mid 2007.

The funds are managed by the Institute for Educational Development (IED) based at the Aga Khan University (AKU) in Karachi. The grant will be used to strengthen human resource management and the capacity of education institutes. The IED is working with government, private and NGO/community-based educational systems. It is targeting not only the education, but also the general social welfare needs, of individuals and communities who have failed to benefit from economic growth. This includes people living in remote rural areas, where it is particularly important to provide suitable education for girls and to the poorest villagers. The IED will also support efforts made by its new graduate teachers to introduce educational changes in the communities where they are teaching.

Due to be trained: 1 200 visiting teachers, 180 subject specialist teachers, 150 school heads, 150 education officials, and 180 Master of Education students. The IED is confident of reaching these targets because, during its first phase (1992-2000), all its planned activities reached their intended targets on or well ahead of schedule. The actual number of students considerably exceeded initial targets, and many programme objectives were close to being matched inside one year of operation. For example, 40 teacher training programmes produced 1 121 new teachers (double the original target), with women outnumbering men by two to one.

Elementary education for all in India

The EC is scheduled to have contributed € 200 million by December 2007 to support "the new national initiative launched by Government of India for achieving universal elementary education, also known as Sarva Shiksha Abhiyan." which will be spending € 27 billion to provide quality elementary education to all Indian children in the 6-14 age group by the year 2010. The SSA essentially groups all existing elementary education schemes under one umbrella, thereby ensuring consistency in the Indian government’s funding and management of the elementary education sector as a whole.

In supporting SSA, the EC is building on its longstanding experience in school education in India, having committed €150 million in 1993 towards the District Primary Education Programme. This has been remarkably successful in providing primary education to large numbers of first generation learners in the 6-11 age group, particularly to girls and children from deprived communities.

Implementing the major policies of the SSA will involve some decentralisation and community-based planning. Suitable new school curricula will have to be introduced, and special classes will have to be set up to cater for the needs of the most deprived children. In areas where there are no local schools, the programme will provide alternative schooling facilities. Efforts will also be made to make the idea of attending school more attractive.

6. E CONOMIC CO - OPERATION

Economic co-operation with Asia has the following aims:

• The promotion of mutually beneficial business-to-business co-operation;

• The raising of the profile of Europe in Asia, and of Asia in Europe;

• The strengthening of Europe’s economic presence in Asia; and

• The assistance to countries to define and implement policies to improve their

economic environment and performance.

In practical terms the EC combines a horizontal or sector specific approach with a regional or country specific one, whichever serves best for the targets to be achieved.

Examples of regional and country specific actions are given below:

EU Programme Area of economic co-operation Benefits

At regional level

1 Asia Invest Promotion of business agreements and Finding business partners, joint ventures attracting new investment

2 ASEM Trust ASEM countries hit by financial crisis Financial and training

Fund 1 assistance

3 Asia IT&C Information and communications Asian countries join the global technology information society

4 Asia Urbs Urban developments Socio-economic development

5 Asia Link Co-operation in higher education East-West inter-university links

6 Asia Ecobest Transfer of EU environmental best Cleaner air, better water practices quality and waste water management

Asia Invest

Started in late 1997, the current phase of the Asia Invest The EU countries directly Programme is due to expire in September 2002. Since it started, involved in Asia Invest are

98 projects have been financed with a total EC contribution of Belgium, Denmark,

€11.5 million. During 2000, 34 projects were approved, with the France, Germany, Italy, Luxembourg, the

EC contributing €4.93 million. Netherlands, Portugal,

Spain, Sweden and the

Asia Invest aims to promote partnerships between SMEs in the UK. (*)

EU and in the developing countries in Asia. It provides grants to co-finance projects initiated by non-profit organisations which (*)Asian partner countries

benefit groups of companies. It also organises business meetings include countries of South and South East Asia and China,

between European and Asian companies, briefs EU companies on excluding Japan and Korea market access and investment opportunities in Asia, and provides (North and South). training to EU and Asian companies. (For further details consult the website www.asiainvest.com. )

The ASEM Trust Fund 1

In response to the financial crisis of the late 1990s in Asian ASEM countries, the ASEM Trust Fund1 was set up in 1998 to provide technical assistance and relevant training to governments. The fund is administered by the World Bank, and the EC contributed onethird of the fund’s total €45 million. Available funds have been fully committed to individual activities in the social (49%) and financial (51%) sectors.

The Trust Fund also supports the creation and development of links between intermediary organisations, such as chambers of commerce or trade and industry associations in both the EU and Asia.

P ROGRAMME FOR TRANSITION TO A MARKET ECONOMY IN L AOS

Two projects have been helping the Lao People’s Democratic Republic to develop a market-oriented economy. The ASEAN Support Project has helped Laos to integrate in the ASEAN group, thus contributing to the stability and security of the region. This 18- month programme started in January 2000 and has already achieved many of its goals, including successful training and study tours for Lao officials. The Banking Training Project is intended to help the Lao banking sector to improve its capacity to give backing to private sector initiatives.

Asia ITC achievements in 2000

The aim of Asia ITC is to integrate more countries in South and South-East Asia into the global information society. The Programme Partners (about 174 organisations) are almost equally distributed between Asia and Europe. About a fifth of the total co-financing forecast of €9 million has already been allocated. Co-financed projects are limited in number and may last up to three years. Some of them are for practical demonstration purposes, showing the different ways in which Europe and Asia may be interconnected. Help is also given with understanding European and Asian legislation. Nearly half of the 39 proposals put forward in 2000 have been accepted; the most popular areas of activity are agriculture and society. In 2000 an implementation agreement was concluded between Thailand and the European Commission.

EBIC S : E UROPEAN B USINESS I NFORMATION C ENTRES

European Business Information Centres (EBICs) are short-term projects that assist Councils of EU Business Associations in Asia in building up a resource and information base so as to increase the capacities of EU and Asian small and medium enterprises (SMEs) to engage in mutually beneficial collaboration for trade and investment. In 2000, EBICs were funded in India, Malaysia, Philippines and Sri-Lanka

Asia Urbs

Asia Urbs, launched in February 1998, aims to strengthen EU participation in the socioeconomic development of Asia. € 26 million of its EC budget of € 30 million is earmarked for co-funding projects and studies, while €4 million is allocated to technical assistance.

During 2000, 12 projects and five studies were approved, leading to the EC co-funding grants of € 5.4 million. The first projects started up in August 2000. The programme cofunds urban development projects and studies which have been jointly submitted by EU and Asian local authorities. The EC grant per project (lasting a maximum of two years) ranges from € 300 000 to € 500 000; the grant range per study is € 10 000 to € 15 000 (maximum six months). The upper limit of EC funding is always limited to 65% of the total budget.

Within the framework of the Programme, 62 European local governments and 39 Asian local governments have established partnerships. In addition, 72 European non-local government actors (NGOs, private sector organisations, academic institutions) and 34 Asian non-local government actors are involved in the partnerships. Further details are given on the website www.asia-urbs.com .

ASIA-EcoBest

Asia-EcoBest promotes European environmental best practices and business in Asia, operating through the autonomous Singapore-based Regional Institute of Environmental Technology (RIET). A wealth of EU knowledge and experience is placed at Asia’s disposal on environmental policies, standards, laws and regulations, not forgetting training, education and consultancy in best practice, clean treatment technologies and clean industrial processes. In this way, Asian countries are able to take the shortest routes to sustainable economic development.

During 2000, 46 projects in ten Asian countries were accepted out of 81 requests for support from 43 Asian and 38 European organisations.

In 2000, RIET and Asia EcoBest co-organised three conferences in Asia on the themes of urban air quality, water and waste water management and eco-efficiency. Seventy companies attended the business-matching event ‘Enviroconnect’ held in Kuala Lumpur at the beginning of May.

Bilateral Projects

Among the bilateral projects we have selected three examples targeted at enhancing China’s ability for economic transition:

Business training in China

• The China-Europe International Business School (CEIBS) is providing high-level

management training and help with the transfer of international management expertise to managers in China. This will further aid China’s integration into the world economy, and enhance its commercial and industrial links with the European Union. Following an independent evaluation of CEIBS, which pronounced it a success story, the EC will continue to fund CEIBS to train expatriate management and faculty staff,

and support scholarships and internships.

• The EU-CHINA Junior Managers Programme was formally launched in Beijing

(its centre of operations) in autumn 2000 to train young and promising European managers in the Chinese language and business culture. This is done through intensive Chinese language training courses, seminars and workshops. There are also company visits or internships within companies based in China. A third intake group has

already been selected: 35 young professionals representing 13 EU countries.

• The EU-CHINA programme for the development of industrial vocational

training is designed to increase the skills of the technical workforce in China. Training is available for workers and for the company and technical instructions themselves, in a designated centre. The first group of training projects was organised in collaboration with 20 Sino-EU Joint Venture companies in China. The first pilot

projects started in September and October 2000.

Higher education

Several Asian countries, such as China, Malaysia, Pakistan and Thailand, are partners in European Studies Programmes (ESPs), which the Commission continued to support in 2000. Bilateral studies programmes such as these are important for promoting a better understanding of the EU among present and future decision-makers in Asia, whether their backgrounds are academic, business or political. These programmes are training future managers in the beneficiary countries, therefore the end result will also enhance economic co-operation with the EU.

The study programmes themselves, supported with EU funding of around €15 million, take various forms.

• Postgraduate studies

The Asian Institute of Technology (AIT), based in Bangkok, works to improve economic, social and cultural relations between Europe and Asia. It aims to reinforce European presence in Asia, and vice versa. Its regional Postgraduate Technological Studies Programme (PTS) has been receiving EC support since it started in 1997, and during 2000 it received €2.4 million. In this programme, post-graduate students are exchanged between the AIT and a number of universities in EU Member States. The PTS five-year target is to recruit 90 Asian and 90 European exchange students, each

holding a Bachelor’s Degree in an appropriate field.

• New regional and horizontal institutional programmes

1. The ASEAN-EU University Network Programme (AUNP), Agreed in January 2000 and due to start during 2001, the AUNP will promote university partnerships between ASEAN and European universities. Joint projects will also be encouraged and subsidised in order to foster long-term relations between these higher education institutions. The EC will be contributing €7 million. The AUNP will be managed from Chulalongkorn University in Bangkok, and is expected to become operational by the end of 2001.

2. The Asia-Link Programme, Adopted by the Commission in October 2000, the Asia-Link programme will encourage and develop networking links between higher education institutions in Europe and Asia. The programme will benefit a wide range of people, from postgraduate students to tutors/professors, principals and education managers, working in Europe, South Asia, South-East Asia and China. Grants under Asia-Link will be awarded for the implementation of co-operative projects proposed by groupings of higher education institutions based in one Asian country and in at least two different EU Member States. The EC will contribute €40 million to this programme for the period 2001-2006, giving particular support to the development of human resources, of institutions and systems, and of new curricula.

Culture

• The Asia-Europe Foundation (ASEF) was established in Singapore in 1997 in the

framework of ASEM. It aims to foster mutual understanding between Asia and Europe by promoting exchanges between the civil societies. During 2000, the Commission continued to support the ASEF with €3.5 million. ASEF has a wide range of activities in three fields: intellectual exchange, people-to-people exchange

and cultural exchange.

• In the framework of the EU-India Economic Cross Cultural Programme (EIECP),

new projects were launched which brought the total number of EU-supported projects to 35. The EIECP was adopted in 1995 and aims to enhance existing cultural and economic links between India and the EU. However, following certain management difficulties and other problems that came to light in 2000, the entire programme is being evaluated by external consultants with a view to deciding whether, and in what

form, the programme will continue to develop.

7. H ORIZONTAL POLICIES

Environment

As in every other region, the Environment is a priority in Asia. The specific thematic activities developed by the EC are complementary to the environmental element usually present in most of the programmes and projects. We can find a good example in Luang Prabang’s humid areas (Laos)

T HE W ETLANDS OF L UANG P RABANG

The town of Luang Prabang is on the UNESCO world heritage register. With its numerous ponds and streams, it is one of the main cultural and tourist attracts of Laos. The wetlands, which run through the town like a green band, permit aquaculture and market gardening, and stock some of the rainwater, thereby limiting the risk of flooding during the monsoon season and contributing towards water purification by natural filtering. Regrettably, they are also polluted by domestic waste water, forming infected zones.

The Association for the Development and the Urban Development of the Chinon District (ADUC), in collaboration with Heritage House* has reacted to this problem in several ways. They drew up a programme to enhance awareness in the local population, including the creation of an eco-museum and operations in schools. A technical training programme (waste water treatment by lagooning, installation of sanitation systems) and collection of scientific data have begun.

This project, which will end at the beginning of 2002, is at present two thirds completed and has already produced tangible results. Sanitation systems have been installed in two pilot schools and 14 houses, two specialists are completing their training and the ecomuseum should open soon.

The European Union is contributing to this initiative to the tune of € 385,000 out of a total budget of over € 560,000. It should be noted that the local population, who feel particularly concerned by this matter, are also making a financial contribution.

Further information:

http://www.ambafrance-laos.org/laobas/cooperation/patrimoine/zones-humides.htm

• * 

  Office for architecture, urban development and the environment created by the Provincial Authorities in August 1996.

ECHO (Emergency Humanitarian Assistance)

Asian countries received just over 16% of total EU humanitarian assistance funds spent in 2000.

FINANCIAL DECISIONS FOR HUMANITARIAN AID BY REGION IN 2000 (ECHO)

ASIA DECISIONS IN € Million

TOTAL 77,072

Afghanistan/Pakistan/Iran – Drought 9,500

Afghanistan – General 12,017

Bangladesh 1,500

Burma 1,000

Cambodia/Vietnam 10,400

China (Including Tibet) 1,300

India 5,830

Indonesia 7,500

Laos 1,140

North Korea 8,050

Philippines 2,635

Sri Lanka 1,200

Thailand 4,500

Timor 10,500

R ESTORATION AND DEVELOPMENT OF HEALTH SERVICES IN E AST T IMOR

After the post-referendum violence in September 1999, the people of East Timor were in a situation of acute humanitarian crisis. Health services had completely broken down. Doctors (mostly Indonesian) had fled the country, and health facilities had been destroyed. ECHO responded immediately to this humanitarian crisis by sending funds to the NGOs that were providing health services to the population.

At the end of the year, an international Donor Conference in Tokyo created the Trust Fund for East Timor (TFET), to which the EC gave €19 million. In April 2000 the Commission was part of a joint donor mission which set up the Health Sector Rehabilitation and Development Programme (HSRDP) to provide immediate basic health services and infrastructure, and to develop health policies for the newly independent country.

With access to basic first-line health services thus restored, ECHO began a gradual withdrawal in November 2000, successfully transferring its financing of NGO aid to the TFET.

European Initiative for Human Rights

In supporting the democratic development of this vast continent, for which € 7,607,000 have been made available, particular emphasis has been placed on China, East Timor, the autonomous region of Xinjiang, Hong Kong, Macao and Inner Mongolia. The abolition of the death penalty, human freedoms (including that of the press), education and human rights training as well as co-operation with the High Commission for Human Rights were all prioritised during 2000.

Parliamentary elections were held in Sri Lanka on 10 October 2000, except in territories affected by fighting or which were under the de facto control of the LTTE. To mark its support for the democratic process, the European Union sent a European observer mission. During the voting, observers were deployed in 400 polling stations in 22 districts of the city of Jaffna. This mission, headed by MEP John Cushnahan, enjoyed excellent co-operation with its Sri Lankan counterparts (public authorities, political parties, election commissioner, NGOs, etc.) during the campaign and the election. With € 701 000 of funding, the German organisation GTZ co-ordinated the EU election monitoring mission in Sri Lanka.

The EU-China dialogue has been a major forum of discussion on human rights-related questions. The EIDHR has financed two distinct projects in the context of this dialogue:

• € 70,200 was granted to the French Ministry of Foreign Affairs for organising an EU-

China legal seminar on human rights which was held in Paris in December 2000. Chinese and European researchers, NGOs, trade unions and members of the Council’s Human Rights working groups gathered to examine together the topic of workers’

rights and criminal justice.

• The University of Lisbon received € 203,300 to co-ordinate the EU-China dialogue of

May 2000. Dialogue topics were the death penalty, China’s ratification of the Union Nations Pacts on civil and political rights and economic, social and cultural rights, the principle of equal rights for men and women and the difficulties confronting minority

groups.

Working with NGOs

The Commission gave assistance to boost NGO projects primarily in the fields of health, education, social development, rural and agricultural development (including irrigation and clean water management). A few projects involving good governance, institutional support and food security also obtained some co-funding support. Overall, €23.8 million was committed by the EC in support of 51 projects in 13 Asian countries and regions.

NGOs help Indian communities to manage their natural resources

The Community Management of Natural Resources (CMNR) project aims to improve the living standards of people living in deprived environments in target areas of the states of Gujarat, Rajasthan and Madhya Pradesh in India, through the sustainable development of their local natural resources. The project started in 1994 and is due to end in December 2001. The EC contribution for 2000 was €14 million.

The Project is managed by the Aga Khan Foundation, which is a funding umbrella for the assistance given by two independent NGOs: the N.M. Sadguru Water and Development Foundation, NMSWDF, and the Aga Khan Rural Support Programme (India), AKRSP(I). Each NGO has its own agenda and working method, but both seek to give village communities greater control over, and expertise in, the management of their natural resources.

The combined achievements to date are substantial. In the four states of central West India the quality of life has improved for more than 300,000 households in over 1,000 villages. Many are small and marginal farmers, owning farms smaller than one hectare. Access to newly created sources of irrigation water has helped to double and even treble their incomes, and thereby ‘distress migration’ has been greatly reduced. Soil and water conservation measures have been applied to over 60 000 hectares of farmland. Villagers have planted nearly 50 million trees on private and government land. 1,300 waterharvesting structures have been built, irrigating almost 40 000 hectares of land. Some 8,000 bio-gas plants have been installed in village households.

NMSWDF has been working since 1974 with the tribal population of the Panchmahals district in Gujarat, and in 1995 extended its work into neighbouring areas of Rajasthan and Madhya Pradesh States. The AKRSP(I), set up in 1983, works in the coastal Junagadh district, the drought-prone Surendranagar, and the tribal areas of Bharuch district. Inside these districts, approximately 750 000 people living in 460 villages have been helped. AKRSP(I) has provided drinking water supplies to over 5 000 homes, not only to cover a critical water shortage but also to try to reduce the drudgery of women’s work.

Under the CMNR, the villagers have been organised into around 1 350 village-level institutions, many of which are now showing increasing signs of maturity and independence. Some of them have formed federations, capable of assuming some of the roles of their parent NGO. The village institutions now have combined financial assets of more than 12.5 million rupees (equivalent to € 300,100). They supply agricultural inputs worth more than 6.4 million rupees (nearly € 154,000) annually. The agricultural produce of members brought to market totals about 2.2 million rupees (some € 53 000) annually. Middlemen are cut out, so poorer farmers are able to earn higher incomes.

India : NGOs against Drug Adiction

Using substitution drugs, stopping the exchange of needles, getting treatment without delay, providing treatment for AIDS, adopting preventive attitudes to HIV.: these are courses of action being proposed to drug addicts by a series of NGOs working in major Indian cities. This “open” approach has proved successful, both on an individual level and for larger groups of drug users. Proof of the success of these efforts is a certain degree of loyalty that has been built up between the organisations and their “customers”, who now stay in contact longer with the organisations. Apart from helping to reduce the suffering of individuals, the NGOs offer them treatment for drug addiction and support for their rehabilitation which is, in the last analysis, to the benefit of society as a whole.

Thanks to these results, six of these organisations have also helped to draft or to change government policies on the prevention and treatment of drug addiction. This is why they are officially allowed to administer drug substitution methods.

Since 1994, the EU has been funding almost 20 NGOs involved in this approach. This support is improving the operational and administrative capacities of these organisations, as well as promoting active local-level networking and developing small businesses that can offer the target groups concerned a way out of their addiction, and access to viable economic rehabilitation.

8. E UROPEAN I NVESTMENT B ANK (EIB)

The European Investment Bank (EIB) participates actively in EU co-operation policies worldwide and also in Asia. Through its lending policies it supports projects of mutual economic interest. Funding is provided by the budget of the European Union and/or the Member States, and its aim is to optimise the benefits accruing to beneficiary populations.

EIB loans to Asia in 2000

€ Mio

Indonesia 70,0

(Extension of gas pipeline from Sumatra, including project for export of gas to Singapore)

Bangladesh 36,2

(Construction of cement production plant near Chhatak, north east)

Thailand 26,4

(Construction of complex for air traffic control at the second international airport in Bangkok)

Total 132,6

9. C ONCLUSIONS

As indicated in the introduction on Asia, the Commission first set out an overall framework for EC relations with Asian countries in its 1994 Communication “Towards a New Asia Strategy”. The Commission is due to adopt an updated strategy, taking into account key developments in the intervening years, and establishing a comprehensive strategic framework for our relations with Asia and its sub-regions in the coming decade.

Since 1994 our political dialogue with key partners in the region has intensified, and our trade and investment relations have expanded (notwithstanding the impact of the East Asian Crisis). There has been a modest growth in our development and economic cooperation with Asian countries. But much remains to be done, for example in deepening and broadening our political dialogue, in enhancing our bilateral trade and investment relations and strengthening our co-operation in the WTO, and in ensuring that our aid programmes in Asia can achieve their full potential. However it appears that the degree of mutual awareness between our two regions remains insufficient.

VIII Latin America

Growing ever closer by the year, and underlined by commercial opportunities and shared economic and political objectives, relations between the European Union and Latin America are also taking the form of co-operation and development projects. Advancing and protecting human rights, promoting the information society, fighting poverty, and reducing social and educational imbalances are just some of the Union’s priority concerns on this vast sub-continent.

The European Union (both the Community and individual Member States) is the largest provider of public bilateral aid to Latin America. These relations have been focused, for several years, on the economic, political and cultural levels. This strategy towards the Latin American sub-continent was already heralded by the “Basic Document on the Relations of the European Union with Latin America and the Caribbean”, which the Council approved in 1994. Continuing this dialogue, a number of priority directions were defined in the Communication on the “Follow-up to the first summit between Latin America, the Caribbean and the European Union” 56 , adopted by the Commission in October 2000. This document envisages three priority areas of co-operation:

– Promoting and protecting Human Rights

– Promoting the information society and

– Reducing social imbalances.

Education is also included in these areas.

The way in which relations have developed between the European Union and Latin America shows the pertinence of these directions 57 , in particular in the differentiated approach that has been taken in order to reflect regional and national specificities on this heterogenous sub-continent. Political relationships have become deeper, trade has increased, European investments have grown, and Community co-operation has remained at close to € 500 millions a year in commitments since 1996.

56 COM(2000) 670 final i

57 The reader is referred to the Communications: COM(1995) 495 final i “The European Union and

Latin America – The present situation and prospects for closer partnership 1996-2000”, approved in December 1995, and COM(1999) 105 final i “On a new European Union – Latin America

partnership on the eve of the 21st century”, approved in 1999.

Latin America: the sub-regions

Central America Andean Community Mercosur Other

Costa Rica Colombia Argentina

El Salvador Ecuador Brazil Chile

Guatemala Peru Paraguay Mexico

Honduras Bolivia Uruguay

Nicaragua Venezuela

Panama

CO-OPERATION IN 2000

In 2000, the European Community signed a number of framework co-operation agreements with Latin American countries and regional sub-groups (Mexico, Brazil, Paraguay, Uruguay, Argentina and Chile/Central America, the Andean Community and Mercosur). Each of these agreements makes provision for regular follow-up meetings – the so-called “Mixed Committees” – in which the Community participates via the Commission and Member States. Support for regional integration comes partly from the Mixed Committees. Specialist sub-committees are also set up when particular areas require it (co-operation, trade, science and technology) 58 .

The Commission’s co-operation activity takes the form of implementing projects and programmes. These are targeted as a function of local situations and are carried out by public bodies and by operators from bodies representative of civil society. Whilst the problems encountered differ enormously from one country to another, the priority objective of a large part of the budget is fighting poverty.

1. R EGIONAL CO - OPERATION

EC co-operation at a more global level reflects the priorities that have been defined in a legal framework that has been established for the entire region. Economic co-operation 59 is one of its instruments. At the same time the Commission accords distinct sub-regional priorities for which specific initiatives can be developed under the existing institutional

58 The mixed committees meet every one or two years. Several of these met in 2000: EC/Argentina

(Buenos Aires, 4 April); EC/Mercosur (Buenos Aires, 5 April, framework inter-regional cooperation agreement); EC/Chile (Santiago, 12 April); EC/Brazil (Brussels, 24-25 May); EC/Central America, sub-committee (Guatemala, 10 July); EC/Paraguay (Brussels, 3 October);

EC/Uruguay (Brussels, 5 October).

161 agreements. In Central America, co-operation is directed mainly at supporting the strengthening and consolidation of the rule of law, the modernisation of public administrations, social policy, the process of regional integration and the insertion of this region into the global economy. In respect of the Andean Community, two priorities need to be mentioned: supporting institutional reform and combating drugs. The co-operation priorities between the EU and Mercosur, as well as with Mexico and Chile, are more at the economic and commercial levels.

An example is the conclusion of the free trade agreement with Mexico, after the adoption of the decision 2/2000 60 . It is also important to point to the negotiations which took place in 2000 for introducing an EU-Mercosur Association Agreement. Equally worthy of mention is the renewal of the Generalised System of Preferences-Drugs in favour of the Andean and Central American countries, which is under negotiation. It will need a WTO waiver.

Almost € 229 million have been committed for 29 actions and projects of a regional character involving either the entire sub-continent or the various regional groupings. This budget represents over half the financial commitments for 2000. These projects reflect the priorities established by the EC for development co-operation activities: trade and investment policies, private sector competitiveness, integration and regional cooperation (including economic, social and cross-border environmental problems), etc.

Regional Projects - geographic distribution of the commitments

Region Percentage Amount in € N° of projects million

Central America 39% of the total i.e. € 89 7

Andean Community 3% of the total i.e. € 6 3

Mercosur and Chile 6% of the total i.e. € 13 2

Regional - Latin 52% of the total i.e. € 120 17

America

TOTAL 100% € 228 29

In 2000, the Commission accorded particular importance to co-operation initiatives at the regional level, which make the Community’s action more effective and contribute to the gradual integration of the sub-regions. The “No Borders” and “Pilcomayo Basin” projects, from two very different regions - clearly illustrate this co-operation.

C ENTRAL A MERICA –"N O B ORDERS " PROJECT : S ALVADOR -H ONDURAS

The El Salvador-Honduras border zones, with their particularly conflict-laden history, are home to particularly destitute populations. In both countries there are some half a million people living in extreme poverty. A bi-national development programme, with € 30 millions of Union support, has helped sustain Honduras and El Salvador in the difficult process of normalising their relations as neighbours. This programme is centred on three strategic directions, accepted by both

162

countries: the fight against poverty, decentralisation, and regional integration in Central America. The pacification and development initiatives have also made it possible to attract national and foreign investment in the region, thereby marking a further step towards economic and political stabilisation. The two beneficiary countries have each provided support of € 6 million.

MERCOSUR – THE PILCOMAYO BASIN

The Pilcomayo river, shared by Argentina, Bolivia and Paraguay, has given its name to a Tri-National Commission that is working to develop this region. The process of opening

up to the outside world and economic growth have been stimulated by a Master Plan, which has directed and defined the priorities and actions, as well as the necessary short

and long-term investments. Support from the Commission totals € 13.2 million.

Commitments towards the sub-continent as a whole have run to around € 500 million annually in recent years, mainly in the form of non-reimbursable aid. In 2000, the European Community’s global co-operation effort towards Latin America added up to some € 429 millions in 2000, representing 312 projects financed out of 20 budget lines.

DESCRIPTION OF THE MAIN BUDGET Amounts Projects/actions LINES

€ (as % of (as % of total, total,

(000) rounded) Number rounded)

FINANCIAL AND TECHNICAL 158.949 37% 16 5% COOPERATION

ECONOMIC COOPERATION 70.674 17% 14

REHABILITATION AND RECONSTRUCTION 48.275 11% 2 1% IN LATIN AMERICA

FOOD AID 35.823 8% _

NGOs 52.461 12% 113 36%

EMERGENCY AID, CATASTROPHE 31.720 7% 98 31% PREVENTION AND HUMANITARIAN

INTERVENTION

ENVIRONMENT AND TROPICAL FORESTS 5.507 2% 5 2%

DEMOCRATISATION AND HUMAN RIGHTS 14.559 4% 7 3%

163

TOTAL 429.387 100% 312 100%

2. E CONOMIC CO - OPERATION

This co-operation, in a spirit of mutual interest, seeks to create and strengthen commercial and economic ties between the EU and partner countries. In this area, initial priorities are: setting up mechanisms for promoting a stable and dynamic world level system, then strengthening national financial systems and developing specific programmes which can provide economic support to less developed countries. These cooperation programmes and projects will contribute to development in these countries by helping them strengthen their institutional capacities. This is why economic co-operation supports institutions like Chambers of Commerce which can contribute to opening up economies. Similarly, institutional support is aimed at improving market regulation and introducing industrial standards. Annual commitments out of the “economic cooperation” budget line amounted to EUR 70 millions in 2000. Part of this co-operation takes the form of horizontal programmes, with bottom-up strategies which seek to promote partnerships. These very concrete programmes, in response to targeted needs, are adapted to the specific players. They are addressed at Europeans and Latin Americans who decide to work in synergy because they share common ambitions, technologies or trades. The fact that the majority of the projects supported by these co-operation programmes are developed and carried out by the participants themselves, further

increases their medium and long-term impact.

ALFA Programme

ALFA – Latin America Academic Training is a co-operation programme between European and Latin American higher education institutions who want to work together on projects of common interest. Objectives: increasing scientific and technological potential, creating knowledge transfer mechanisms and encouraging exchanges, not only

between these two continents, but also between the various regions of Latin America.

This co-operation programme is network-based, with an emphasis on three specific areas: engineering, medicine and other health sciences, economics and sociology. The decentralised management structure devolves a key role to civil society players. The programme, launched in 1994, entered a second six-year phase in 1998. In phase one the Commission supported 183 projects to the amount of € 8 million, in phase two it is

backing 663 projects totalling € 26 million.

2000 was devoted to managing projects approved during phase one 61 . Following a selection round, 12 contracts were drawn up, representing € 1 million in Commission

contribution and € 752 000 of co-financing.

FOOD ENGINEERING

The opportunity to master food processing - including quality criteria and engineering, analysing the complex effects of certain treatments on product quality, learning new and

61 Signing of one new contract, 27 amendments to existing contracts, approval of 172 execution

reports, payment of EUR 2.6 millions on outstanding contracts

better performing techniques was given to 16 students who enrolled in a 3rd cycle training programme (food process quality engineering), and was supported by 12 scientific institutions and co-ordinated by the University of Reading under the ALFA programme.

In addition to acquiring technological skills, this mobility experience is allowing students to network, create contacts and pool experience, as well as immerse themselves in another culture. On their return to their own countries, these young people will be transferring significant amounts of know-how.

AL-INVEST Programme

Latin American SMEs are looking to modernise, to open up to new markets and to internationalise. European SMEs are interested in the prospects offered by the Latin American market and are looking for partners to help them penetrate it. Reciprocal interests, shared benefits. AL-INVEST 62 , a decentralised co-operation programme supported by the Commission, responds to this double trend by helping arrange meetings and partnerships between small enterprises of the two continents in order to promote trade exchanges and technological transfers. The result: mutual enlargement of markets and logistical support in the regions where they wish to invest. Its resources: information, sectoral meetings, creating one-off, specific events and activities, and the CAS internet system (Computer Access System).

The record is impressive: 179 events under the aegis of AL-INVEST have been attended by no less than 300 chambers of commerce and industrial associations and 22,000 SMEs from the two regions. The resulting business flow is an estimated € 230 million over four years (1996-2000), including more than € 60 million in direct investment. Total Community expenditure in achieving this was € 40 million.

Speed and effectiveness are key words at AL-INVEST. Applications from the private sector are approved by the Commission within two and a half months, with the aid contract signed four months later.

In 2000, 50 sectoral meetings were selected and contracted, as well as five ARIEL (Active Research In Europe and Latin America) actions, a specific instrument of the AL- INVEST programme.

STRAWBERRIES UNDER HIGH SURVEILLANCE

At Buenos Aires, on the wings of the SIAL Mercosur trade fair, AL-INVEST organises a meeting between Latin-American and European strawberry producers. One French SME is on board, via Interco, an AL-INVEST network member based in Bordeaux. Very interested in gaining new contacts, its senior management travels to Mar del Plata (Argentina) and Porto Alegre (Brazil) to judge the harvests on the ground. The trip ends with a test order. When the imported fruit fails to live up to all its promises, a meeting is

62 AL-INVEST (Latin America – Investment) has three component parts: operators (COOPECO,

Eurocentres, professional associations, chambers of commerce, foundations, consultants, etc.), SMEs and the Technological Information Promotion System (TIPS) network.

organised by AL-INVEST at Agen (France) for the Brazilian and French companies, plus the forwarding agent, to discuss solutions. Conclusion: an exclusivity agreement to supply strawberries during the winter, for three years, for a minimum of € 1 million a year. The Brazilian forwarder has been tasked with transporting the produce in optimal conditions of freshness. Parallel with this, it is decided to organise technical monitoring of the part of production earmarked for the French SME, via a European consultancy office and a European producer. An initial technical assistance mission is organised in October 2000. This synergy of skills has borne its “fruits”. The importer is buying higher quantities than forecast.

ATLAS Programme

Initiated by Eurochambres (Association of European Chambers of Commerce and Industry), the ATLAS programme seeks to improve ties between networks of Union and Latin American CCI’s and to offer optimum support to the economic opportunities that are developing, through training and information initiatives. ATLAS, which covers over 200 CCIs from 15 Member States and 18 Latin American countries, represents a total budget of € 2.4 millions, 75% of it financed by the EC, and runs for two years (2001- 2003). The project proposes a series of instruments to facilitate the transfer of know-how and benchmarking between these organisations: twinnings, trainee placement programmes, managerial refresher courses, etc.

@LIS Programme

@LIS - Alliance for an Information Society 63 has been set up to promote political dialogue between the two regions and exchanges on questions of regulation and standardisation. Its strong point is the opportunity given to non-profit organisations in the two regions to present proposals for pilot applications in four areas: local governance, health, education and social exclusion.

URB-AL Programme

Big and small cities all face specifically urban problems that differ little from one continent to the next. Why could the solutions found here – properly adapted and not just carbon-copied – serve as a source of inspiration for others? How do we create links between local entities, comply with good practices and examples that have been launched elsewhere, analyse common problems together? The URB-AL programme, intended to create links between local authorities, brings together around 700 cities (from metropolis down to small town) in Europe and Latin America.

With a budget of € 14 million, URB AL is organised into eight thematic networks: drugs and towns; conservation of historic urban contexts; democracy in towns; the town as promoter of economic development; urban social policies; urban environment; management and control of urbanisation, control of urban mobility. Members of these networks identify common priorities and discuss action instruments that could respond to the problems that are encountered.

63 The @LIS programme is right now at the design stage. A decision whether or not to go ahead

could be made before the end of 2001.

Joint projects are developed and proposed to the Commission under the sponsorship of their respective co-ordinators. Some fifty such projects have been co-financed until now.

Phase two of URB-AL was approved by the EC in December 2000. Running for five years, URB-AL II will have a budget of € 50 million (easily triple that of its predecessor).

D EMOCRACY IN THE TOWN

The new information technologies can contribute to a better sharing of power through local participation. E-democracy is setting out to involve citizens in the management of their cities by using new means of communication. Network no. 3 of the URB-AL programme, co-ordinated by Issy-les-Moulineaux (France), has since 1998 been actively discussing the topic of “Democracy in the town” with around 150 European and Latin-American elected representatives * . These activities are making it possible to combine, day by day, the local and international dimension of the city, by making globalisation a springboard towards exchanges of know-how between local authorities on the two continents.

These encounters have produced a number of joint projects. The “International Observatory of Local Democracy” is gathering a wealth of ideas that will help develop mechanisms to promote participation in the public business of the city.

The aspirations of every citizen for greater control in politics, for a high-quality environment, and for combating economic exclusion, are other federating aspects of the concept of democracy in the town which is illustrated in several other joint projects. In this way, “Consultation as a model for strengthening democracy in the city” is tending to introduce more active participation by means of consulting and collaborating techniques which should result in the introduction of new decision-making processes

• * 

  Developing lasting relationships between local authorities and exchanging know-how in a spirit of equity is the mindset in particular of network n° 3, and of the URB-AL programme as a whole, which has set out to be the driving force for decentralised co-operation where towns become agents of international co-operation. Issy-les-Moulineaux intends in the near future to introduce an experiment in participative budgeting with the help of the city of Belo Horizonte (Brazil).

These very concrete programmes illustrate the Commission’s activity in the area of cooperation. This co-operation is not, however, limited solely to the economic area but also encompasses financial and technical co-operation.

3. F INANCIAL AND TECHNICAL CO - OPERATION

The aid measures that the Commission has allocated seek to promote growth in ways that benefit the poorest sections of the population. Recognised as a key strategic tool, financial and technical co-operation was supported to the tune of € 159 million in 2000. Directed mainly at the poorest countries and population sectors, this co-operation takes the form of projects carried out in sectors where Community aid can play an important role. Most of the projects covered by this budget line fall into the categories of peacekeeping activities, good governance, fighting poverty, protecting the environment, helping heavily indebted countries, improving river transport and parliamentary cooperation.

Infrastructures

Being concrete and tangible, infrastructures are probably some of the most visible results of co-operation. They give physical form to development, but are not limited to visible structures. Strengthening communication networks helps overcome the isolation in which certain populations live, improving living conditions for the worst off, facilitating trade etc. Construction and improvement work – even when on a modest scale – can transform the lives of the inhabitants of a whole village or district.

One such example is the successful Villa Europe Ko’ejú project in Paraguay, which has received € 955,000 from the EC. 252 low-income families living in the suburbs of Asuncion now own a small house (50 m², salubrious, and with solid walls and roof). General access to drinking water has changed the hygiene and health conditions – epidemics and diseases have fallen dramatically and some have even disappeared. A school has been built. Daily life has gained in terms of dignity.

But infrastructures can also play another, totally different role. Certain infrastructure projects, for example, seek to protect local populations from natural catastrophes. The city of Montero flood protection project has been a beacon project for the EU in Bolivia (more than 80% of the total budget of € 17 millions came from the EC). Over 50 kilometres of dikes have been built to protect a number of townships against the frequent flooding of the Montero river, which used to directly affect over 110 000 people. 15 hectares of agricultural land have been recovered in the process and roads and other communication channels are no longer subject to the capriciousness of the waters.

Health

Even if income is very unequally distributed in Latin America, health indicators have improved during recent years, life expectancy has risen and the mortality rate of infants under 5 has continued to drop. Whilst many problems remain, the majority of the population has access to health care. The priorities here are:

– Improving poorer people’s access to health care,

– Reforming health care systems in order to strengthen their general delivery capacity,

– Ensuring permanent financing.

The European Community is contributing significantly to the reform of the health sector which is under way in Latin American countries. The majority of the projects that the Commission supported in 2,000 lie in this area 64 The Commission also provides supplementary financing for certain projects supported by other organisations, such as the Inter-American Development Bank and the World Bank. Two examples are given below.

Bolivia: Health care from A to Z

64 By way of example: GTM/B7-3010/95086: Apoyo a la reforma del sector salud, NIC/B7-

3100/96/088/ Fortalecimiento del sistema de salud, VEN/B7-3100/97/101: Apoyo al sector hospitalario Caracas

A vast programme to radically improve health conditions has been introduced in the departamentos of Potosí and Tarija. Studies are being carried out and a health care plan defined in each department, and drinking water supply and waste removal systems are being upgraded. One specific initiative aims to improve health care infrastructures (hospitals and dispensaries) and equipment. Training will be provided for both medical and hospital administration staffs. Access to medication should be improved. Health and hygiene campaigns will also be designed for the general public, whose involvement is vital to this reform process. The Union is contributing € 30 millions to this initiative.

Peru: Clean drinking water for Lima

Peru experienced the ravages of cholera in the early 1990s. First to be affected were the poorest sectors of the population, crowded around the major cities in deplorable sanitary conditions, including the edges of the city of Lima. The disastrous situation in certain quarters of the city, with the constant threat of a new outbreak of the epidemic, gave rise to the “Drinking Water” project. Objective: to distribute water of good and controlled quality, to as many people who need it. In order to reach this population, some 330 000 inhabitants in 292 urban zones – the project’s promoters opted to undertake a large number of micro-projects. 250 such projects managed a total network of 175 drinking water systems, involving 400 kilometres of piping, 204 storage reservoirs, 102 pumps and 5,000 water collection points . This original approach, for which the EU provided € 7.8 million, is an interesting example of introducing an improvement scheme in conditions where a conventional approach would have been impossible .

Education

A major factor of sustainable growth is an appropriate, effective educational system. Education counts for much in improving productivity, which in turn allows growth rates to increase and inequality to be reduced. Despite real progress in facilitating access to primary education in Latin America, the poorer parts of society continue to experience difficulty in gaining access to secondary and, in particular, university education. Throughout the region there is a need to reform educational systems and to better target educational resources. In addition to horizontal regional programmes such as ALFA, Commission projects directed at the educational sector take account of local situations. These projects have very concrete objectives, like the PASE project in Peru, a successful initiative in the field at vocational education.

C ONCRETE TRAINING PROGRAMMES

Students are aged between 15 and 29 and come from modest families. They can choose between courses in hotel services, farming and food processing, shoe and garmentmaking, crafts, car repairs and commerce. This training is intended, first and foremost, to be practical, by placing young people in real-life situations. Training programmes are adapted to particular regions, and directed at trades which meet local production needs, to avoid the “children” migrating to the big cities and abroad This is the apprenticeship which is being offered, every year, to around 65 people, by the 11 Experimental Vocational Training Centres in the PASE (Proyecto de Apoyo al Ajuste Social Estructural) project in Northern Peru. Setting up and equipping the pilot project cost € 2 million. Whilst instructors’ salaries are set by the Education Ministry, the PASE centres retain their status of small self-managed centres which are seeking to be financially autonomous. The network has been entrusted to a Spanish NGO, Fe y Alegría. This experiment is an excellent example of efficiency and of taking on board the needs of the local communities. It is planned to generalise this initiative right across the country.

Environment and Tropical Forests

Combating poverty necessarily goes hand in hand with environmental objectives and the strategies introduced for the general welfare of the populace. Recent years have therefore seen increased attention to the protection of the environment, with the safeguarding of natural resources and sustainable development now an underlying feature of all Community programmes. Many projects in this sector focus on the interaction of human activities and the environment in the Amazon region. Financing is both from specific budget lines, and from general environmental protection lines.

Equatorial Amazonia, a project completed in 2000 with € 7 million of Union support, has made it possible to contain the negative effects of oil drilling activities, in particular in protected zones. A clean and inexpensive technique for decontaminating hydrocarbonpolluted soils was developed in co-operation with the oil companies involved. An environmental laboratory and a monitoring and control system have been put in place. This action is all the more effective for having been undertaken together with the oil companies, leading to a positive change of attitude by them towards respecting the environment and the communities living in these areas.

C ONSERVATION OF THE B RAZILIAN FOREST *

An ambitious pilot programme for forest conservation in Brazil (PPG7) was launched in the early 1990s. For its promoters, “conserving” the forest means both protecting and promoting the sustainable development of the regions in question – in other words promoting the needs of the present generation without compromising those of generations to come.

The RESEX project is one of the main components - and also one of the most successful – of the PPG7 programme. The aim is to support the “extractive reservations” which the Brazilian government set up ten or so years ago. These “reservations” are very special ecological areas. The native communities living in them receive long-term land leases and are authorised to use the natural resources in exchange for managing them in a healthy manner. Since 1995, four such reservations have been home to 107 “base units” of 1,718 families. Over 70% of these have formed associations to manage their communities’ needs. The ecological and economic results of this initiative are impressive, as the figures show. Over 8,000 people have attended more than 670 information sessions. Household income has risen from 396 Brazilian reals (BRL) a year before the project to BRL 2,800 just four years later, higher than that of 70% of the population of the region of North Brazil. 2.16 million hectares are now under surveillance and control. Inside the reservations, the deforestation rate has remained under 1% (the authorised standard is 10%) and has been reduced considerably in the surrounding areas *.

€ 650,000 have been invested in “utilisation and growth plans” which have gained the support of the various communities inside the reservations. Data bases have been created of environmental, social, economic and biophysical information, whilst an environmental monitoring system (including cartographic data) within the reservations has been developed and implemented. € 1.6 million have been used, much of it for the management and structural improvement for the National Centre for the Sustainable Development of Traditional Populations (CNPT) and the Brazilian Environmental Institute (IBAMA). Training programmes and logistical support for the regional offices have also been provided, as well as support for the various partnerships essential to the success of the project.

• * 

  Programme PPG7 has benefited from a global grant of US$ 330 million for phase one, part of it allotted to the World Bank's Rain Forest Trust Fund. The European Commission has provided € 70 million since the programme was launched, the second largest contribution after Germany (135 million). The other main fund providers are the United Kingdom (23 million) and the United States (10 million). Phase one of the RESEX project (1995-2000) benefited from a € 5 million contribution from the EC under the tropical forest budget line. The EC will probably contribute € 7 million to phase two.

4. H ORIZONTAL POLICIES

Human Rights and Democratisation

Since the Treaty of Amsterdam, the Union now possesses a significant legal framework for promoting human rights in its external policy. This advance allows the Community to support the activities of international and regional organisations and NGOs. A commitment appropriation of € 14 millions has been made available for consolidating the process of democratisation in Latin America. 65 . In this way the Commission is encouraging the strengthening and development of a responsible civil society and at the same time supporting vulnerable groups. Two examples provide good illustrations of this approach:

A NCHORING DEMOCRACY IN E CUADOR

The High Commission for Human Rights has decided to support the Ecuadorian government in implementing an Ecuadorian national action plan on human rights. This objective enjoys support of 373,500 €. The HCHR provides educational and training activities. It will also participate in efforts to strengthen the position of the ombudsman

O BSERVERS IN P ERU

In Peru, 42 people have taken part in an election observation mission. This action has received € 2 million of support for overseeing media coverage of the election period and educating citizens in the electoral process and in making voting choices.

65 The management of the geographic budget lines with all third countries is now grouped in a single

department. The emphasis placed on the strategy of co-operation in this area is expressed in the guidelines contained in Regulation (EC) 975/99 i of 29 April 1999. Two large new programmes have been initiated in Colombia: the Andean Human Rights Programme (to which the EC is contributing € 3 million) and the Cien Muncipios de Paz project, being carried out by the Colombian NGO Redepaz. These are just two examples facilitated by the restructuring carried

out, since the beginning of 2000, in the Human Rights and Democratisation sector.

Rehabilitation and reconstruction

Resources have been focused here mostly on Central America, and in particular the countries struck by hurricane Mitch (Guatemala, Honduras, Nicaragua, El Salvador).

The vast Central America Regional Reconstruction Programme (CARRP) is receiving financial support from the EC. An initial financial commitment of € 82 millions (out of a total appropriation of EUR 250 millions) was signed at the start of 2000. An initial call for proposals in the context of local initiatives was launched in September 2000, and several advance notices of service contracts were published in the final quarter of the year.

In December 2000, the Commission adopted a second financial commitment decision in the context of CARRP, in an amount of € 44 million.

HONDURAS: AFTER MITCH

The Community programme in Honduras is directed at the poorest producers, in line with the priorities and aid conditions defined by the government’s Maestro plan, introduced in the wake of hurricane Mitch (1998). The food security programme consists of three action plans:

• 1) 

  access to financing and credit. This programme, which has been up and running since 1996, provides direct funding to local rural credit institutions for loans to small farmers wanting to buy production factors;

• 2) 

  access to land and the strengthening of land law. Since 2000 this has taken the form of a programme which promotes a participative approach by local populations in co-operation with local and national authorities;

• 3) 

  development and marketing of farm products. Here technology transfer and vocational training are helping to boost small producers’ profit margins.

A general emphasis is placed on participation by the beneficiary populations, so as to neutralise the potential dependency effects of donor-initiated projects.

Refugees and displaced persons

With regard to aid to refugees and displaced persons, 2000 was devoted to defining the multi-annual programme 2000-2004, with a budget of € 16 millions. This programme consists of three national components (Mexico, Nicaragua, Guatemala) and a regional technical co-ordination component 66 . In Central America, where most of the crisis situations have stabilised, projects focus in particular on the integration or return of displaced populations. There were no new budget commitments in 2000.

66 Council Regulation 442/97 i, which constituted the legal basis of actions financed under the budget

line of aid to uprooted populations, and which expired on 31.12.99, was renewed for one year until 31.12.2000.

M EXICO : INTEGRATION OF FORMER G UATEMALAN REFUGEES

Project to support the definitive integration of former Guatemalan refugees in the states of

Campeche, Quintana Roo and Chiapas

April 2000. Andres Jimenez Andres and Pablo Juan Miguel, president and treasurer respectively of the rural production company Manos Unidas para el Progreso (Santo Domingo Keste), present a positive economic report for the second year running to their 101 partners. The sale of 1 710 tons of water melons, harvested over 57 hectares, has brought in a total of 2 231 655 pesos. Everything began in 1982 when groups of Guatemalans fleeing the war ended up in the Chiapas forests in Mexico. Two years later (for security reasons but also in order to facilitate distribution of humanitarian aid) they were displaced by the Mexican authorities to the plains of Campeche. It is there that they succeeded in becoming self-sufficient. In 1996, with the signing of peace in Guatemala, many of these refugees wanted to remain in Mexico, a country of asylum where their children had been born and grown up. Hence, since 1997 a programme has been implemented by the EC and the Mexican government specifically to support their integration,. This project, based on co-responsibility and co-management, aims to strengthen those micro-regional development processes that can promote the integration of the one-time refugees. Essentially, it is supporting agricultural income creation, vocational training, development aid to small businesses, along with socio-cultural initiatives (social organisation, consultation, promotion of the Mayan identity, improving basic infrastructures, etc.). The positive results of this experiment have encouraged the Commission and the Mexican government to support the second phase of the initiative. This definitive integration support project is aimed at consolidating the progress already made in the states of Campeche and Quintana Roo and at extending the programme to the state of Chiapas, where the socio-political problems are more difficult. This new initiative provides for a Community contribution of EUR 5.5 millions. It will benefit 53 000 persons (24 000 of them of Guatemalan origin and 29 000 Mexican) across over 150 local communities.

Gender

Improving the status of women and encouraging equality of the sexes is important, not only in absolute terms, but also as a contributing element to general economic and social development. The Commission is placing a particular emphasis in women’s role in the development process.

Eliminating disparities between women and men is one important aspect of all projects supported by the Commission. For this reason all projects financed in Latin America take the “gender” dimension into account in defining their objectives and activities.

P ANAMA : F OR EQUALITY

“Women’s Offices” have been set up in various public institutions, work has begun on improving teachers' awareness of the gender question, support has been provided to women’s organisations, and the integration of women into trade unions has been facilitated. These are the initial results of the “Women and Development” National Plan which has been developed in Panama, and which the EC is supporting with € 9 800 000.

This programme aims to rebalance the situation of men and women at both socio-cultural and economic and political levels. After a certain number of start-up difficulties, it is now running smoothly. ( www.proigualdad.com )

Humanitarian Aid (ECHO)

The Community finances operations to provide humanitarian aid to the victims of the countries touched by disasters, both natural and man-made. Directed towards populations in distress, this help is supplied both in kind and in the form of services. The year 2000 was a difficult period for Latin America due to conflicts and natural disasters. The Commission has provided support to the most affected populations. This aid is detailed below:

LATIN AMERICA ECHO FINANCIAL DECISIONS in € Million

TOTAL 24.560

Central America .

(El Salvador Honduras, Nicaragua) 4.425

Colombia 6.500

Cuba 2.000

Mexico 0.850

South America .

(Peru, Brazil, Ecuador) 4.035

Venezuela 6.750

Food security

The term “food insecurity” has been adopted by the Council in a regulation which defines the current legal framework of the Commission’s “food security” programme, and which makes food security part of sustainable development and poverty reduction policies. Food security can now be approached in its totality: supply, demand and crisis prevention. In 2000, € 36 millions were been committed for food aid in Latin America. The programmes carried out in Bolivia and Honduras can be cited as examples.

Bolivia: the municipalities

The EC has been intervening in Bolivia since 1995, with direct support for the government’s food security aid programme. This programme finances actions targeted at municipalities (two-thirds of the budget) and departmental prefectures (one quarter of the financing), as well as assisting rural development. The Commission is providing technical assistance for the programme plus funding for actions in 78 municipalities (out of a total of 314) selected on the basis of poverty criteria. Traditional beneficiaries of these interventions are farm production, rural infrastructure development (in particular country roads) and training and technical assistance in both agricultural and nonagricultural sectors. In 2000, micro credits have been included in the range of aid instruments. A major innovation of the present programme is the lead role given to municipalities and NGOs in carrying out the local projects and in access to financial resources.

Drugs Programme

Fighting the plague of drug trafficking and consumption is now a major EU action priority. To do so, the Union has adopted a global strategy in the form of Anti-Drug Action Plans 67 . The programmes the Community supports seek to respond to a problem that is increasingly affecting local populations, both urban and rural. The European Commission has also drafted political instructions to accompany the proposed regulation renewing preferential trading arrangements with, in particular, Andean and Central American countries which benefit from the Drugs GSP. One such country is Bolivia, which can in this way export over 90% of this products on the European market with special privileges or total exemptions from custom duty.

ON THE COCAINE TRAIL

The Commission is financing prevention projects in nine countries (total budget: EUR 2 million). In the Andean countries, it is supporting several initiatives to prevent moneylaundering, monitor the source of funds and harmonise legislation. It has recently begun helping the Venezuelan government set up a national drugs observatory, for which it has provided € 2 million. In Colombia, the EC is seeking a significant role in the peace process, to which it is contributing through alternative programmes (€ 30 million out of a total of € 105 million).

5. R ELATIONS WITH MAJOR E UROPEAN AND INTERNATIONAL INSTITUTIONS

Collaboration between the Commission and the major international co-operation institutions is more advanced in Latin America than elsewhere in the world. These partner institutions complement European co-operation policy by contributing to the funding of projects of mutual interest, to the fight against poverty and to strengthening democracy

European Investment Bank (EIB)

With framework agreements signed with 15 countries, the EIB contributes as a prime European actor in the region to financing investment projects of mutual interest to the EU and Latin American countries. Complementing the Commission’s activities, it has provided financial support, in particular, to the manufacturing, telecommunications, energy, water provision, waste removal and transportation sectors. In 2000, € 400 millions of loans were signed for operations in Argentina, Brazil and Mexico.

175 Inter-American Development Bank (IDB)

The European Commission and the IDB collaborate actively in development cooperation in Latin America, sharing ideas on economic and social development in this region and working together to achieve a better co-ordination of services. The Commission is actively supporting a number of IDB-chaired country advisory groups (Colombia, El Salvador, Guatemala, Honduras and Nicaragua), along with the regional advisory group for Central American reconstruction. The advisory group meetings have achieved their objective of co-ordinating the activities of international donors in the countries in question . Since 1977 the Commission has contributed € 57 million to the IDB’s financial operations, both by financing various operations and via trust funds managed by the IDB. Right now the Commission is providing funding to two large IDB- administered trusts: the special technical assistance fund (€ 4 million), which funds national experts from EU member countries carrying out preparatory studies for IDB projects, and the special SME fund (€ 15 million), which finances micro credit operations up to € 540 000. A Memorandum of Understanding signed by the Commission and the IDB provides a framework for deepening and concentrating their present collaboration, in particular in the fields of democratic consolidation, poverty reduction, social equity, regional integration and IT development.

World Bank

In July 2000 the EC agreed to contribute to the Trust Fund attached to the Highly Indebted Poor Countries (HIPC) initiative, managed by the World Bank and directed at Asian and Latin American countries. Of its € 54 millions contribution, 45 millions have been earmarked for reducing the debt of Latin American countries like Bolivia, Honduras and Nicaragua. The EC is actively supporting the development of strategy documents for reducing poverty in countries which benefit from the HIPC programme.

United States Agency for International Development (USAID)

The EC is working alongside USAID in the context of the New Transatlantic Agenda (NTA) and a Joint Action Plan. Regular contacts exist in areas of shared interest like developing the private sector, strengthening institutional capacities, assistance to democratic institutions, Human Rights and decentralisation.

A study on the evolution of development problems in Central America has been undertaken by the Hamburg Institute for Ibero-American Studies and Inter American Dialogue in Washington, DC. This analysis, which was very well received by USAID, features a model for regional economic integration, with proposals for strengthening democratic institutions, for progress towards customs and monetary union, and for the reform of the tax and budget systems of the countries in the region.

Organisation of American States (OAS)

During 2000, those EU Member States with permanent observer status in the OAS met monthly to discuss problems of interest with the Union and to dialogue with senior OAS officials. In June 2000, an initial consultation also examined the possibility of achieving a framework co-operation agreement between the EU and the OAS on election monitoring.

6. P ERSPECTIVES

The priorities established at the Rio Summit in June 1999 have been integrated into the Commission’s strategies for the various countries and regions, as well as into its cooperation programming, in line with the constraints and objectives specific to this area. The objectives of the strategic partnership remain the same: strengthening relations between the two regions, whose growing interdependence justifies the search for common responses to global challenges.

The Commission’s co-operation policy is aimed at expanding trade and knowledge of each other’s cultures. This reciprocal recognition offers a solid basis from which economic co-operation and regional integration programmes, financial aid to disadvantaged populations, and efforts to boost the education and high technology sector, all of which will be supported from Community budgets, can take shape.

The Commission’s efforts are also being concentrated on ways of increasing the effectiveness of the sectoral programmes in a longer-term perspective (for example through multi-annual planning), defined in agreement with the beneficiary countries.

Reform of management systems, with devolvement of responsibility towards local Commission Delegations, has been set in motion with the aim of increasing performance within the time limits of the various programmes.

Financial tables

Breakdown by budget line of development assistance financed on the General Commission Budget in the year 2000

Amounts in M€ Total (grants & loans) Managed by EuropeAid Managed by other DG's Item Description Commitments Payments Commitments Payments Commitments Payments B1-3… Food Aid Russia (FEOGA) - 4,64 - 4,64 - - B7-01.. Pre-Adhesion - SAPARD 528,90 - - - 528,90 - B7-02.. Pre-Adhesion - ISPA 1016,29 2,54 - - 1016,29 2,54 B7-03.. (1) Pre-Adhesion - PHARE 1568,63 1201,19 1566,49 1200,35 2,14 0,84 B7-04. . (1) Pre-Adhesion - Malta & Cyprus 7,70 - 7,70 - - - B7-20.. Food Aid 458,05 437,50 458,05 437,50 - - B7-21.. Humanitarian Aid 489,70 540,88 - - 489,70 540,88 B7-30.. Asia 481,10 323,36 481,10 323,36 - - B7-31.. Latin America 277,90 195,20 277,90 195,20 - - B7-32.. South Africa 123,54 110,14 123,54 110,14 - - B7-40.. (1) Mediterranean 44,25 73,91 44,25 73,91 - - B7-41 MEDA 942,85 345,90 942,85 345,90 - - B7-42.. Near & Middle East 60,64 53,18 60,64 53,18 - - B7-51.. European Bank for Reconstruction & Devt (EBRD) - 6,41 - - - 6,41 B7-52.. NIS & Mongolia - TACIS 449,13 429,01 448,35 427,62 0,78 1,39 B7-53 NIS & Mongolia/CEEC's - Other actions 111,88 125,98 9,88 40,41 102,00 85,57 B7-54.. Balkans 859,71 676,42 419,81 468,95 439,90 207,47 B7-60.. Cofinancing NGO's 199,98 130,97 199,98 130,97 - - B7-61.. Training & public awareness/WID 8,05 8,39 8,05 8,37 - 0,02 B7-620. Environment/tropical forests 32,07 41,68 32,07 41,68 - - B7-621. Health/anti drugs & addiction 28,45 24,01 28,45 24,01 - - B7-6410 Rehabilitation 16,52 20,93 16,52 20,93 - - B7-6430 Decentralised cooperation 2,97 5,53 2,97 5,53 - - B7-65.. Evaluation/coordination/anti-fraud 11,81 5,67 11,81 5,67 - - B7-6610 Anti-personnel mines 8,36 6,46 8,36 6,46 - - B7-66.. Other specific actions 35,61 34,52 3,04 2,25 32,57 32,27 B7-70.. Democracy & human rights 93,83 53,15 93,83 53,15 - - B7-80.. International fishing agreements 124,21 127,35 - - 124,21 127,35 B7-8710 Bananas ACP 44,48 3,35 44,48 3,35 - - B7-8720 Investment promotion ALA/MED (ECIP) 1,76 6,44 1,76 6,44 - - B7-8... Other external chapters of Community policy 31,55 31,86 0,26 0,26 31,29 31,60 B8-0… Common Foreign & Security Policy (CFSP) 41,65 23,20 41,65 23,20 - -

Total Title B1-B7-B8 8.101,57 5.049,77 5.333,79 4.013,43 2.767,78 1.036,34

(1) - Responsibility for the whole of B7-03.. and B7-04.., as well as for a portion of B7-40.. transferred to ELARG during the course of 2000

Breakdown by instrument of development assistance financed on the European Development Fund (EDF) in the year 2000

Amounts in M€ Total Managed by EuropeAid Managed by other DG's Instrument Decisions Payments Decisions Payments Decisions Payments

Programmed aid 1645,46 718,76 1645,46 718,76 - - Structural Adjustment 459,50 147,32 459,50 147,32 - - Risk Capital 122,59 152,55 122,59 152,55 - - Interest rebates 24,50 17,42 24,50 17,42 - - Emergency Aid 1,52 28,26 1,52 28,26 - - Aid to refugees 24,19 1,79 24,19 1,79 - - Sysmin 94,10 28,73 94,10 28,73 - - Stabex 361,06 70,61 361,06 70,61 - - HIPC 1028,97 356,44 1028,97 356,44 - - Others -4,48 26,28 -4,48 26,28 - -

Total EDF 3.757,41 1.548,16 3.757,41 1.548,16 0,00 0,00

Grand Total Budget + EDF 11.858,98 6.597,93 9.091,20 5.561,59 2.767,78 1.036,34

Breakdown by country of development assistance financed on the General Commission Budget and the European Development Fund (EDF) in the year 2000

Country/Region Total (grants & loans) in Managed by EuropeAid Managed by Other DG's M€

Commitmen Payments Commitmen Payments Commitmen Payments ts ts ts

Part I: Developing Countries & Territories

Official Development Assistance (ODA)

Europe, Total 1491,47 1063,12 850,99 556,57 640,48 506,55

Albania 35,25 80,49 35,25 77,03 - 3,46

Bosnia-Herzegovina 149,35 212,75 128,88 196,36 20,47 16,39

Croatia 23,33 12,53 23,29 11,98 0,04 0,55

Macedonia (Fyrom) 78,43 86,74 21,43 30,33 57,00 56,41

Malta 6,00 1,57 6,00 1,45 - 0,12

Moldova 6,20 5,76 6,12 5,68 0,08 0,08

Slovenia 72,14 29,82 33,90 29,82 38,24 -

Turkey 343,38 35,38 343,38 15,97 - 19,41

Yugoslavia, Fed. Rep. 748,10 510,98 223,47 157,44 524,63 353,54

States Of Ex-Yugoslavia 25,45 87,09 25,45 30,51 - 56,58 Unspecif.

Europe Unalloc. 3,84 0,01 3,82 - 0,02 0,01

Africa, Total 3215,99 1484,83 2970,85 1283,73 245,14 201,10

North Of Sahara, Total 371,23 212,39 356,99 196,03 14,24 16,36

Algeria 46,83 17,37 32,59 1,57 14,24 15,80

Egypt 17,55 95,09 17,55 95,09 - -

Morocco 141,80 63,17 141,80 63,02 - 0,15

Tunisia 90,19 21,94 90,19 21,53 - 0,41

North Of Sahara Unalloc. 74,86 14,82 74,86 14,82 - -

South Of Sahara, Total 2844,76 1272,44 2613,86 1087,70 230,90 184,74

Angola 49,44 40,16 35,57 30,71 13,87 9,45

Benin 62,12 4,21 62,12 4,21 - -

Botswana 16,58 7,55 16,58 7,55 - -

Burkina Faso 58,61 45,57 58,61 45,57 - -

Burundi 25,94 10,73 12,16 2,41 13,78 8,32

Cameroon 78,81 46,25 78,81 46,25 - -

Cape Verde 29,54 2,84 29,54 2,66 - 0,18

Central African Rep. 36,24 6,64 36,24 6,64 - -

Chad 65,44 19,60 65,44 19,54 - 0,06

Comoros 8,79 4,61 6,43 2,99 2,36 1,62

Congo, Dem. Rep. 51,84 37,05 31,84 30,30 20,00 6,75

Congo, Rep. 3,21 3,14 0,21 2,19 3,00 0,95

Cote D'Ivoire 51,25 10,45 50,87 10,41 0,38 0,04 Djibouti 11,44 2,24 11,44 2,24 - -

Equatorial Guinea 1,70 2,56 1,38 2,29 0,32 0,27

Eritrea 30,70 6,83 24,65 2,74 6,05 4,09

Ethiopia 90,26 79,47 75,81 74,79 14,45 4,68

Gabon 36,47 16,32 36,20 15,98 0,27 0,34

Gambia 10,54 8,83 10,54 8,83 - -

Ghana 22,15 20,07 22,15 20,07 - -

Guinea 16,37 22,98 13,04 20,42 3,33 2,56

Guinea-Bissau 31,88 18,99 23,38 9,44 8,50 9,55

Kenya 142,32 25,63 136,89 22,12 5,43 3,51

Lesotho 2,09 12,81 2,09 12,81 - -

Liberia 0,38 13,80 0,38 13,80 - -

Madagascar 22,42 25,90 20,51 24,14 1,91 1,76

Malawi 39,34 56,56 39,34 56,56 - -

Mali 37,68 23,84 37,68 23,77 - 0,07

Mauritania 88,74 65,02 36,81 13,28 51,93 51,74

Mauritius 9,95 5,67 9,12 5,43 0,83 0,24

Mayotte 0,80 0,52 0,80 0,52 - -

Mozambique 143,30 88,13 134,62 82,93 8,68 5,20

Namibia 4,40 17,42 4,40 17,42 - -

Niger 133,41 15,40 133,41 14,85 - 0,55

Nigeria 74,65 4,63 74,65 4,63 - -

Rwanda 101,03 53,98 101,03 53,95 - 0,03

St.Helena - - - - - -

Sao Tome & Principe 12,39 6,74 10,80 5,78 1,59 0,96

Senegal 56,95 38,31 44,95 26,15 12,00 12,16

Seychelles 2,60 7,00 0,30 4,65 2,30 2,35

Sierra Leone 103,81 15,60 91,81 14,40 12,00 1,20

Somalia 29,73 25,35 26,37 23,24 3,36 2,11

South Africa 128,21 112,02 128,21 112,00 - 0,02

Sudan 76,77 16,77 65,77 4,04 11,00 12,73

Swaziland 24,20 8,17 24,20 8,17 - -

Tanzania 162,38 40,73 135,53 18,06 26,85 22,67

Togo 19,43 3,83 19,43 3,83 - -

Uganda 199,76 45,45 198,95 45,45 0,81 -

Zambia 160,02 30,25 158,52 29,05 1,50 1,20

Zimbabwe 46,85 11,96 46,85 11,96 - -

South Of Sahara Unalloc. 231,83 83,86 227,43 66,48 4,40 17,38

Africa Unspecified - - - - - -

America, Total 567,22 404,15 542,13 365,68 25,09 38,47

North & Central, Total 309,79 234,94 302,31 215,60 7,48 19,34

Anguilla -0,21 - -0,21 - - - Antigua & Barbuda 0,44 0,56 0,44 0,56 - -

Barbados 1,13 2,02 1,13 2,02 - -

Belize 15,79 7,58 15,79 7,58 - -

Costa Rica 0,38 1,21 0,38 1,21 - -

Cuba 16,17 7,50 14,17 2,68 2,00 4,82

Dominica 8,68 1,18 8,68 1,18 - -

Dominican Republic 49,07 15,03 48,87 14,98 0,20 0,05

El Salvador 9,59 15,72 8,50 14,96 1,09 0,76

Grenada 0,58 0,43 0,58 0,43 - -

Guatemala 7,10 22,65 7,10 21,93 - 0,72

Haiti 3,96 12,55 3,96 12,55 - -

Honduras 29,26 19,72 27,76 18,59 1,50 1,13

Jamaica 49,02 47,10 49,02 47,10 - -

Mexico 1,81 4,59 0,96 3,67 0,85 0,92

Montserrat 0,23 0,08 0,23 0,08 - -

Nicaragua 24,58 46,40 22,74 44,72 1,84 1,68

Panama - 3,43 - 3,43 - -

St.Kitts-Nevis 4,00 1,56 4,00 1,56 - -

St.Lucia 21,34 4,29 21,34 4,29 - -

St.Vincent & Grenadines 9,95 1,31 9,95 1,31 - -

Trinidad & Tobago 11,04 1,83 11,04 1,83 - -

Turks & Caicos Isl. - 0,58 - 0,58 - -

West Indies Unallocated - - - - - -

N. & C. America Unalloc. 45,88 17,62 45,88 8,36 - 9,26

South, Total 161,28 143,45 143,67 124,32 17,61 19,13

Argentina 12,53 11,15 12,53 7,06 - 4,09

Bolivia 31,01 27,51 31,01 27,47 - 0,04

Brazil 28,49 18,47 27,64 18,47 0,85 -

Chile 14,31 5,85 13,99 5,85 0,32 -

Colombia 7,58 15,84 1,08 7,79 6,50 8,05

Ecuador 7,73 7,67 5,86 6,34 1,87 1,33

Guyana 16,53 8,28 16,53 8,28 - -

Paraguay 1,02 5,30 1,02 4,98 - 0,32

Peru 19,95 26,15 18,63 25,62 1,32 0,53

Suriname 7,24 2,70 7,24 2,70 - -

Uruguay 1,91 2,69 1,91 2,69 - -

Venezuela 8,18 9,51 1,43 4,74 6,75 4,77

South America Unalloc. 4,80 2,33 4,80 2,33 - -

America Unspecified 96,15 25,76 96,15 25,76 - -

Asia, Total 1129,52 799,30 1000,65 705,13 128,87 94,17

Middle East, Total 386,34 246,09 352,28 226,41 34,06 19,68

Bahrain - - - - - - Iran 3,70 0,32 3,70 0,32 - -

Iraq 8,60 7,69 - 0,37 8,60 7,32

Jordan 22,02 93,17 22,02 92,99 - 0,18

Lebanon 9,19 40,99 9,19 40,99 - -

Oman - - - - - -

Palestinian Admin. Areas 173,92 58,21 150,20 51,32 23,72 6,89

Saudi Arabia - - - - - -

Syria 49,60 7,29 49,60 7,14 - 0,15

Yemen 23,72 20,71 21,98 18,73 1,74 1,98

Middle East Unalloc. 95,59 17,71 95,59 14,55 - 3,16

South & Centr. Asia, Total 439,67 305,64 393,12 269,39 46,55 36,25

Afghanistan 19,87 19,24 11,77 13,03 8,10 6,21

Armenia 17,80 13,11 17,80 13,11 - -

Azerbaijan 25,36 21,84 25,36 21,83 - 0,01

Bangladesh 36,48 74,22 34,98 71,36 1,50 2,86

Bhutan - 0,97 - 0,97 - -

Georgia 15,26 14,93 14,86 14,36 0,40 0,57

India 235,85 50,12 230,00 42,33 5,85 7,79

Kazakhstan 0,89 5,21 0,89 5,21 - -

Kyrgyz Rep. 10,10 16,29 10,10 16,22 - 0,07

Maldives - 0,19 - 0,19 - -

Myanmar (Burma) 6,93 1,73 5,93 0,51 1,00 1,22

Nepal 4,42 16,01 4,42 16,01 - -

Pakistan 21,96 33,12 21,96 32,91 - 0,21

Sri Lanka 5,05 6,48 3,85 5,68 1,20 0,80

Tajikistan 20,00 13,74 1,00 1,28 19,00 12,46

Turkmenistan - 2,77 - 2,77 - -

Uzbekistan 10,00 11,62 10,00 11,62 - -

South & Central Asia Unalloc. 9,70 4,05 0,20 - 9,50 4,05

Far East, Total 197,74 218,49 149,48 180,49 48,26 38,00

Cambodia 17,40 28,36 8,90 19,96 8,50 8,40

China 32,83 29,78 31,50 29,52 1,33 0,26

East Timor 36,28 19,02 36,28 18,60 - 0,42

Indonesia 25,72 40,88 7,72 29,02 18,00 11,86

Korea, Dem. 28,37 27,13 20,00 20,24 8,37 6,89

Laos 13,28 8,42 12,14 7,45 1,14 0,97

Malaysia 0,35 0,22 0,35 0,22 - -

Mongolia 6,18 5,86 4,30 4,93 1,88 0,93

Philippines 12,19 29,95 9,55 29,36 2,64 0,59

Thailand 18,62 13,07 14,12 8,28 4,50 4,79

Viet Nam 4,62 13,15 4,62 12,91 - 0,24

Far East Asia Unalloc. 1,90 2,65 - - 1,90 2,65 Asia Unspecified 105,77 29,08 105,77 28,84 - 0,24

Oceania, Total 74,27 71,29 74,27 71,29 - -

Cook Islands - - - - - -

Fiji -0,97 0,82 -0,97 0,82 - -

Kiribati 1,61 1,13 1,61 1,13 - -

Marshall Islands - - - - - -

Micronesia, Fed. Sts. - - - - - -

Nauru - - - - - -

Niue - - - - - -

Palau - - - - - -

Papua New Guinea 23,04 8,39 23,04 8,39 - -

Samoa 3,04 4,12 3,04 4,12 - -

Solomon Islands 44,87 48,10 44,87 48,10 - -

Tokelau - - - - - -

Tonga 0,08 1,52 0,08 1,52 - -

Tuvalu -0,78 0,01 -0,78 0,01 - -

Vanuatu 1,92 6,86 1,92 6,86 - -

Wallis & Futuna -0,01 0,05 -0,01 0,05 - -

Oceania Unalloc. 1,47 0,29 1,47 0,29 - -

LDC's Unspecified 633,43 579,54 451,60 433,06 181,83 146,48

Multilateral Aid 1242,34 540,52 1242,34 540,52 - -

UNRWA 54,04 40,14 54,04 40,14 - -

WFP 105,33 89,94 105,33 89,94 - -

HIPC 1082,97 410,44 1082,97 410,44

Part I (ODA), Total 7132,83 3955,98 7132,83 3955,98 1221,41 986,77

Part II: Countries and Territories in Transition - Official Aid (OA)

More Advanced Developing 10,53 18,14 10,53 17,24 - 0,90 Countries

Aruba -0,82 1,11 -0,82 1,11 - -

Bahamas -0,83 2,24 -0,83 2,24 - -

Bermuda - - - - - -

Brunei - - - - - -

Cayman Islands - - - - - -

Chinese Taipei (Taiwan) - - - - - -

Cyprus 1,70 2,28 1,70 1,38 - 0,90

Falkland Islands - - - - - -

French Polynesia 10,62 3,72 10,62 3,72 - -

Gibraltar - - - - - -

Hong Kong, China - - - - - -

Israel - 2,01 - 2,01 - -

Korea - - - - - - Kuwait - - - - - -

Libya - - - - - -

Macao 0,99 0,54 0,99 0,54 - -

Netherlands Antilles -0,87 4,07 -0,87 4,07 - -

New Caledonia -0,26 0,71 -0,26 0,71 - -

Northern Marianas - - - - - -

Qatar - - - - - -

Singapore - 0,03 - 0,03 - -

United Arab Emirates - - - - - -

Virgin Islands (UK) - 1,43 - 1,43 - -

MADCT Unallocated - - - - - -

CEEC's/NIS 3494,21 1637,04 1947,84 1588,37 1546,37 48,67

Belarus 0,41 1,60 0,41 1,60 - -

Bulgaria 308,42 85,21 151,35 84,96 157,07 0,25

Czech Republic 196,13 93,52 103,68 93,49 92,45 0,03

Estonia 75,00 42,04 33,99 41,41 41,01 0,63

Hungary 248,23 144,93 121,18 144,51 127,05 0,42

Latvia 104,58 48,81 35,36 48,56 69,22 0,25

Lithuania 170,81 46,50 87,61 45,86 83,20 0,64

Poland 964,08 236,02 485,42 236,00 478,66 0,02

Romania 654,88 152,09 262,44 151,74 392,44 0,35

Russia 72,91 105,49 64,71 97,68 8,20 7,81

Slovak Republic 128,48 56,79 79,57 56,79 48,91 -

Ukraine 64,12 77,75 64,11 77,37 0,01 0,38

CEEC's Unallocated 202,40 270,88 181,49 267,97 20,91 2,91

NIS Unallocated 303,76 266,70 276,52 240,43 27,24 26,27

CEEC's/NIS Unallocated - 8,71 - - - 8,71

Part II (OA), Total 3504,74 1655,18 1958,37 1605,61 1546,37 49,57

Grand Total Part I & Part II 11858,98 6597,93 9091,20 5561,59 2767,78 1036,34 (ODA+OA)

ANNEX

The EuropeAid Co-operation Office was created on 1 January 2001. The former Common Service for External Relations had prior to that date already effected certain reforms in the main areas of the European Commission’s management of its external assistance programmes.

During 2000, the SCR made significant advances on several important issues. A brief description of these activities is given in this annex.

1. E VALUATION ACTIVITIES

Like other major donors of external assistance, the Commission is careful to ensure that all evaluations of its external co-operation programmes are carried out impartially. The Evaluation Unit is therefore clearly separated from all the operational and policy services that use its findings to improve the quality of these assistance programmes.

During the spring 2000 reorganisation of external operations, the Commission decided on a major repositioning of its evaluation function to strengthen its independence and to ensure its findings are used more effectively. The Governing Board of the new EuropeAid Co-operation Office took over responsibility for the evaluation service in January 2001. The Board sets the evaluation service's work programme and encourages the other services to consider its findings carefully and, based on these, take all necessary actions. In addition to the usual policy-level analysis of major sectors, cross-cutting themes, instruments and country programmes, the European Commission's programming process and 'policy mix' are also about to be evaluated.

Four major reports, together with an overall synthesis report, were submitted to the Council in 1999 and were extensively debated. These reports related to the activities of the ALA, MED, ACP and Humanitarian Aid programmes carried out between 1995 and 1999.

1.1. Evaluation findings of 2000

The major evaluations completed in 2000 are listed below. They can be grouped into four main areas:

• Human rights and democracy,

• Aid via civil society organisations (by means of decentralised co-operation and cofinancing

with NGOs)

• Country programmes and strategies

• Phare sectoral programmes 68 .

In some cases, representatives of EU Member States were included in the country strategy evaluation teams. This was generally arranged after the start of the evaluation process, therefore they can not be considered truly joint evaluations. Nonetheless, this experience demonstrated that it might be useful to conduct joint evaluations in the future where and when appropriate.

EVALUATIONS COMPLETED IN 2000

PHARE *

Phare - Posts and telecommunications

Phare - Social sector & labour market

Phare - Transport sector

Phare - Agriculture sector

Phare - Programmes in support of Small/Medium Enterprises (SME)

TACIS

Country programme in the Russian Federation

Supply of agricultural products to Russia

Tacis - Customs programme

Country strategy - Azerbaijan

Country strategy - Moldova

Nuclear safety

Tacis - Lien programme

Tacis - Interstate programme in environment

Tacis - Inogate Programme

Joint programmes between the EC and the Council of Europe

ACP

Human rights (ACP countries)

Decentralised co-operation (ACP countries)

EU assistance to ACP banana producers

Global authorisations for technical assistance

Country Strategy - Papua New Guinea

Country strategy - Senegal

Country strategy - Dominican Republic 1996-2000

Country strategy - Mozambique 1996-2000

Co-operation in the mining sector and Sysmin

68 Responsibility for evaluation in the context of the Phare programme was transferred to the

Directorate for Enlargement in July 2000 Cross-Border Initiative (CBI) (Southern Africa)

UEMOA - Regional co-operation in West Africa

ALA

Uprooted people (ALA)

Health sector (ALA)

Country strategy - Nicaragua

Microfinance in Bangladesh

MULTI-REGION

Cofinancing with NGOs

AIDS/demography budgetlines

Fight against drugs

Food security

• * 

  Evaluation function for PHARE was transferred to DG Enlargement in July 2000 .

1.2. General evaluation comments

Programmes and projects: While general policies, in areas such as human rights and food security, were found to be up to date and relevant, the way they were translated into programmes and projects often led to confusion. In some cases programmes did not take all relevant policy areas into account; in other cases unclear or inappropriate government policies and strategies led to poor identifications of suitable projects.

Partnership and co-ordination: This was often found to be weak. Findings suggested there was insufficient co-ordination between governments and donors, or indicated that the focus of individual donors on their own priorities sometimes hampered the transition to sustainable development (as in the case of Mozambique), and prevented the provision of effective donor support to governments (as in the case of Papua New Guinea and the Dominican Republic). Management committees with EU Member States generally failed to improve their two-way co-ordination and seemed unable to ensure that actions taken on both sides - with regard to food aid or food security - were properly co-ordinated .

Implementation and management: All projects suffered from insufficient Commission staffing. In some cases it was quite severe – human rights issues for example. With resources so scarce, the proper management of projects was deemed impossible. This problem was found to be further compounded by delays in decision-making and implementation. The responsibility for this lay with the Management Committees as well as with the Commission's lumbering implementation procedures (this despite the fact that some bureaucratic measures were imposed on the Commission). The findings concluded that in order to improve the delivery and quality of assistance, European Commission delegations should urgently be reinforced.

Negative results of reorganisation: It has to be admitted that the 1998 reorganisation of the Commission's external services made matters worse in two ways:

• it did not always make clear to staff adapting to new duties what were their

responsibilities and what were those of their colleagues;

• it severely handicapped the provision of external assistance by failing to

resolve certain fundamental staffing problems which came on top of the confusion and delay created by the streamlining of procedures.

Wrong priorities: The excessive emphasis placed on the correct execution of procedures and financial operations often came at the expense of the speedy delivery of assistance and the demonstration of sensitivity to local needs. Evaluations recommended that the European Commission become more preoccupied with the achievement of results.

1.3. Country strategy evaluations

Civil society Involvement: The civil society was found to be generally under-represented in European Commission programmes, despite the fact that this recently improved in a number of countries.

Poverty-related issues: Though the European Commission's handling of issues related to poverty is improving, evaluations found this issue still needed much work.

Institutional issues: The issue of good governance was found to have grown in importance, claiming much more European Commission attention.

Capacity-building: This aspect of external assistance programmes was considered very poor. Evaluations revealed an insufficient focus on developing good, locally owned policies and relevant key institutions. It did, in some cases, find evidence of existing local structures being duplicated or bypassed.

1.4. Using evaluation principles

Since 1987, a series of Council Conclusions and a European Parliament Resolution have set out a list of practices to follow in the conduct of evaluations. These, as well as the pertinent actions taken during 2000, are listed below.

Project Cycle Management (PCM) system: This system is based on the Logical Framework planning tool for project design, monitoring and evaluation. It has since 1993 been gradually incorporated into Commission practices. The Evaluation Unit updated this system at the end of 2000. The number of External Relations staff given the PCM training course has in the space of a year risen from 750 to 1300 (this number includes counterpart staff in developing countries as well as consultants). This course has played a key part in the reform and reorganisation of the External Relations services. A short training course in project-level evaluation developed for Commission staff and their counterparts in partner countries, is now also being given.

Ensuring extensive evaluation coverage: The country, sectoral, regional and thematic coverage of evaluations is now satisfactorily comprehensive – as demonstrated by the list of 2000 evaluations, and its 20% coverage of the Phare 2000 programme. The EuropeAid Co-operation Office, with interim assistance from the Evaluation Unit, will introduce a universal new monitoring system during the year 2001. The new system will greatly increase the flow of information to management, thus helping to improve the very targeting and quality of evaluations.

Exchanging evaluation results with Member States and others: Three meetings were held with counterpart services in the Member States to discuss current and recently completed evaluations and propose new ones. Some first steps were taken to plan joint evaluations based on the ‘3Cs’ - Co-ordination, Complementarity and Coherence. The exchange of results with other donors continued as usual through the OECD/DAC Working Party on Evaluation.

Publishing evaluation findings and maintaining a database: The full texts of all evaluation reports and their short summaries commissioned by the Evaluation Unit since 1998 (they are made by specialised external consultants) can be found under the Evaluation heading on the EuropeAid Co-operation Office website. The Evaluation Unit also maintains a database of Commission-funded evaluation reports made on individual projects.

Involvement of local stakeholders: When evaluations are planned, key local stakeholders are consulted, especially at national and local government levels. This is done during field visits, which are a standard part of each study, and also during the comment stage of draft reports. Discussion is encouraged with civil society organisations and ultimate beneficiaries, wherever practicable. The use of local consultants in evaluation teams is strongly recommended when tendering and contracting for evaluation work. Ways of further developing these practices have been examined, in particular with the ACP Secretariat, and these have been incorporated in new operational guidelines for evaluation.

Preparing new programmes: A programme currently in preparation will list all policylevel evaluations (covering sectors, themes) as well as all evaluations of the 'policy mix' and the programming process.

Feedback: the Interservices Quality Support Group (IQSG) – This is a new group that was created by the May 2000 Communication on the progressive harmonisation and improvement in the quality of programming work. This Communication was based on relevant evaluation findings. At the end of 2000 arrangements were made to transfer to EuropeAid the project-level QSG that was set up by the Directorate-General for Development in 1998. Unfortunately, at the time of reporting, this transfer is not yet complete. This is partly due to the fact that the process will from now on be applied to projects and programmes in all regions instead of just those carried out in ACP countries. Furthermore, allowances should be made for the time required to set up evaluation arrangements for programmes which have hitherto not been subjected to quality controls.

Additional measures: These measures should help all Commissioners dealing with External Relations make decisions on the programme of evaluations and ensure they receive proper feedback. They include:

The 'fiche contradictoire' mechanism: This fiche will set out on paper the recommendations made on the basis of the evaluation findings and the reaction to these of the services concerned. This will allow the Evaluation Unit to inform Commissioners of recommended changes that have been agreed, or others that are being resisted. It is hoped these fiches will help resolve differences so that instructions regarding policies, working methods and resources can be issued. It will also point out which specific corrective measures could subsequently be evaluated.

Regular reporting: The evaluation service is to report regularly to the Commissioners on its major evaluation findings. It will also present six-monthly summaries on new and emerging trends.

Annual reporting: As requested by the Council in October 2000, the Evaluation unit will also produce regular annual reports.

All the above measures taken together will enhance the authority, independence and transparency of the Commission's Evaluation Service in the field of external cooperation, and also increase its ability to bring about change. As a learning organisation, it will find its place in the vanguard of best donor practice.

2. H ARMONISATION OF CONTRACT AWARD PROCEDURES

There have been significant developments in the harmonisation of contract award procedures. The Manual of Instructions adopted by the commission in 1999 was developed this year with two Practical Guides, one covering the pre-adhesion programmes (Phare, ISPA, Sapard), and the other covering all external aid programmes except the EDF, for the time being.

These Practical Guides set out the operational detail necessary to award contracts for services, construction work, supplies and grants. They contain all the standard forms necessary for launching calls for proposals and calls for tender procedures, as well as the corresponding standard contracts. Special rules concerning nuclear safety, applicable in the NIS, were issued by the Commission on 6 September 2000.

A special framework contract – AMS/451 – which covers short-term assistance, lasting less than twelve months and using budgets of less than € 200 000 has also been established. It can be used in 12 different sectors in any country receiving external assistance.

Finally, there is also now a standard agreement for use with international organisations, modelled on the standard External Relations grant contract and the UN standard framework agreements . It can be used for any international organisation, whatever the European Union programme used for funding, apart from the development banks and the international organisations (FAO, UNESCO) with which the Community has already negotiated specific framework agreements.

All of these documents can be found under the Procedures heading of the EuropeAid Cooperation Office website (europa.eu.int/comm/europeaid).

Some figures

In 2000, the SCR handled:

– more than 30, 000 payments totalling € 4.3 billion,

– commitments totalling € 7.7 billion,

– 3, 000 calls for tender,

– more than 8, 000 contracts or addenda to existing contracts.

Statistics show that, in its first seven months of operation, 300 missions were contracted under the AMS/451 short-term contract procedure, representing about € 23 million.

The number of consultations of EC notices published on the Website – both calls for tender and calls for proposals – jumped from 789 in 1999 to 2192 in 2000.

3. E XTERNAL A ID AND ‘RAL’

3.1. RAL vs Backlog

The concept of RAL (reste à liquider) has recently been widely discussed. It has often been wrongly interpreted as an overall backlog. Technically speaking, RAL stands for the amount of outstanding commitments. In arithmetical terms, it is the sum of all amounts committed in the previous budgetary years, minus the total amounts disbursed and de-committed.

RAL exists because of the budgetary concepts embedded in the Financial Regulation applicable to the European Union’s budget, which provides for two types of appropriations for actions that run over from one budgetary year into another:

• commitment appropriations, setting annual limits for the commitments which

will be entered into with third parties, and

• payments appropriations, which are meant to cover each year any foreseen

disbursements to these third parties.

For EDF funding, a similar concept of ‘outstanding amounts’ can be defined as: the difference between the amount of ‘primary commitments’ – which set an upper limit to what can be contracted and spent on a given programme – and the amounts already disbursed.

Inevitably there will always be a number of outstanding commitments, but only some of them represent a real backlog. The others are amounts that have been committed for actions that are actually running according to a timed schedule which is different for each project type or programme funded by the Union.

Although a significant proportion of the amounts still outstanding is in reality neither old nor dormant (77%), all commitments classified as ‘old’ or ‘dormant’ will continue to be subject to regular monitoring.

3.2. How RAL evolved during 2000

In 1999, the tendency of the global RAL to stabilise had already been observed, and this was confirmed in 2000. Indeed, in absolute terms, the RAL for external aid financed through the Union’s budget has only grown by € 713 million in 2000, the smallest increase since 1990. A comparison with 1990 also shows that this RAL increase is in line with the evolution of the amounts committed (1990 values multiplied by 3.3).

For EDF, the significant increase of the global RAL (up € 2.2 billion) is an automatic

consequence of the huge increase in amounts committed after the adoption of the 8 th

EDF.

Two specific areas of concern remain:

• Old commitments (with a life span of more than five years), and

• “Dormant” commitments (budgetary commitments for which no disbursements had

been made in the past two years 69 ).

Both criteria were taken as indicators showing up actions that had either fallen behind schedule or were perhaps already fully paid off. Such RAL are regarded as potentially ‘abnormal’ and have been subject to special review. Some significant results have already been achieved on commitments dating back to before 1995 – the number of old commitments still open has been halved, and the amounts outstanding reduced by 34%.

External Audits in 2000

NEARLY 300 AUDIT REPORTS CARRIED OUT IN 2000

ASIA – LATIN AMERICA – MEDITERRANEAN COUNTRIES

Audits ordered in 1998 and carried out in 2000: 8

Audits ordered in 1999 and carried out in2000: 32

Audits ordered in 1998 and being finalised: 15

Audits ordered in 2000 and currently being carried out: 14

MEDA

Audits ordered in 1999 and carried out in 2000: 5

Audits ordered in 2000 and carried out in 2000: 37

Audits ordered in 2000 and to be carried out in 2001: 25

EASTERN EUROPE EXCEPT THE APPLICANT COUNTRIES

Audits ordered in 1999 and carried out in 2000: 10

Audits ordered in 2000 and carried out in 2000: 2

Audits ordered in 1999 and being finalised: 2

192

NGOs

Audits ordered in 2000 and carried out in 2000 1

ACP COUNTRIES

Audits initiated in 2000 (headquarters and delegations): 137

TOTAL AUDIT REPORTS : 288

OTHER

Management of EWS (Early Warning System) for AIDCO

4. T RANSPARENCY AND THE W EB

The new EuropeAid Co-operation Office's prime concern is transparency of activities and management practices. This was already the case of the former SCR and of all the Commission's other External Relations services.

The Office’s Website (taking over from the former SCR) is a central source of information for potential partners or just people interested in what the European Commission does in the field of external assistance. The website will soon contain progress reports on the implementation of EU aid programmes.

The site contains the full details of contract procedures, together with all the documentation pertaining to these: application forms, standard contracts, procurement notices, calls for proposals and so on so. These documents can be downloaded from the site by interested parties such as companies, NGOs, local authorities etc.

The EuropeAid site also contains final evaluation reports on programmes and projects carried out with EC funding, and will soon provide information on projects still under way.

In addition to the new EuropeAid Co-operation Office website a new Web Portal common to all External Relations services "The European Union in the World" was launched in 2000. It covers all external activities of the European Commission and can be seen as a gateway to all sectors, including country profiles. It is planned to further develop this portal in the near future.

The European Commission External Relations websites

SERVICES ADDRESS AVERAGE VISITS

PER MONTH IN 2000 DG External Relations Europa.eu.int/comm/external.relations 1 million

DG Development Europa.eu.int/comm/development 600 000

EuropeAid Europa.eu.int/comm/europeaid 600 000

Co-operation Office

DG Trade Europa.eu.int/comm/trade 1 million

DG Enlargement Europa.eu.int/comm/enlargement 1 million

ECHO Europa.eu.int/comm/echo 400 000

The EU in the world Europa.eu.int/comm/world 200 000

5. C URRENT REPORTING OBLIGATIONS BY THE E UROPEAN C OMMISSION ’ S SERVICES

The countries of Central and Eastern Europe, the Caucasus and Central Asia

Title Legal basis Type of report Periodicity / Addressee EC leading

Deadline service(s)

Annual Tacis Council Implementation Annual Member AIDCO

Progress Report Regulation of Tacis, States, EP,

(EC, including Council, EURATOM) evaluation of the ESC, CoR

No 99/2000 assistance

of already provided (effectiveness,

29 December monitoring) 1999

Statistical report Same as Award of Annual Same as AIDCO on Tacis above contracts above

Annual CARDS Council Information on Annual (first AIDCO progress report Regulation the actions one in 2001)

(EC) No financed during 2666/2000 of the year; 5 December assessment of 2000 monitoring results; multiannual indicative programmes; annual action programmes

Information on Same as Information on CARDS AIDCO agreed CARDS above forthcoming Committee, financing contracts: the Governing decisions procedure for Board of

their award and the planned dates European for issue of Agency for invitations to Reconstruct tender -ion, Internet

Publication of Same as Every 3 Same as AIDCO calls for tender above months above (plus results, plus OJ) quarterly information on the award of contracts

The countries of the South Mediterranean, Near-East and Middle-East

Title Legal basis Type of report Periodicity / Addressee EC leading Deadline service(s)

Annual Art. 15.1 of Origin: Commission + 30/06/2001 EC, EP RELEX

Report MEDA II EIB

MEDA Regulation No AIDCO

2000 2698/2000 Annual statement on the implementation of the ELARG

MEDA programme (Turkey (actions undertaken & Team)

financial commitment situation)

Global Art. 15.4 of Origin: Commission + Year 2003 MED RELEX evaluation MEDA II EIB Committee report Regulation No (Member

2698/2000 Every 3 years publication on States)

Community assistance to the 12 mediterranean partners, including efficiency assessment of the programmes and strategic documents updating

Evaluation Art. 15.5. of Origin: Commission 31/12/2005 Council RELEX report of MEDA II

the MEDA Regulation No In view of the revision AIDCO

Regulation 2698/2000 i of the MEDA regulation (end 2006), the

Commission submit an evaluation report including recommendations of changes to be adopted by the Council

Activity Origin: Commission 01/06/2001 European RELEX

Report Parliament +

2000 - Economic and political framework of MEDA I Council AIDCO (for MEDA

• - 

  Bilateral co-operation Programme)

  • - 

    Regional co-operation

  • - 

    Evaluation and perspectives

  The countries of Africa, the Caribbean and the Pacific

Title Legal basis Type of report Periodicity Address EC leading

/ Deadline ee service(s)

EDF Accounts - Financial Annual report Annual Budgetary AIDCO

Report on Financial regulation presenting authority

Management commitments and (Council disbursements per +

instrument and their Parliamen analysis t)

Table of financing Contribution to the Monthly AIDCO decisions taken by the Commission's annual

Commission report

AIDCO annual Activities carried out in Annual AIDCO activity report the various ACP

countries and sectors covered by Directorate C

Report on Report for the attention Semi-annual Commissi AIDCO commitment and of the Commissioner oner; disbursement forecasts and Member States for Member

calls for funds States

Annual report on the Lomé The EDF's call for Annual AIDCO results of the EDF's Convention tender calls for tenders

Annual report on Reg(EC)17 Financial situation, Annual AIDCO implementation in the 26/2000 state of implementation

EPRD (South Africa) for the Parliament and

Council

Bi-annual report on Reg(EC)85 Information on state of Every 2 Council; AIDCO implementation of the 6/1999 implementation years Parliamen

"bananas" budget t heading

The countries of Asia and Latin America

Title Legal basis Type of Periodicity Addressee EC leading report /Deadline service(s)

Annual report ALA 443/92 Annual EP, Council AIDCO on implementation of Regulation

ALA 443/92

General report ALA 443/92 Every 5 EP, Council AIDCO on result of years

regular RELEX

evaluations of implementation of Regulation

ALA 443/92

Thematic activity sectors

Title Legal basis Type of report Periodicity Addressee EC /Deadline leading service(s)

Commission' Art. 7 of Information on NGOs Annual European AIDCO s annual Regulation benefiting from (during the Parliament + report on 1658 cofinancing, summary of second Council cofinancing (O.NG.E.) actions financed during half-year, of NGOs previous budget year, after each

evaluation of budget implementation of present year) regulation during current year, as well as general orientations for the following year.

Annual Art. 10 of A summary of activities Annual European AIDCO report on Regulation financed during the year, as (after each Parliament + actions 1659 well as an evaluation of the budget Council financed(decentralised implementation of the year) decentralised co-operation) present regulation in the co-operation course of the period.

Annual Art. 18.2 of A summary of activities Annual European AIDCO report on Regulations financed during the budget (after each Parliament + actions 975 and year, containing budget Council financed in 976/99 information in particular on year) the field of partners with which

human rights activities referred to in Art. (The 2000 and 1 were implemented. The report was democracy. report also includes a drawn up

summary of external by the evaluations and proposes ER/B/1 specific actions where (SEC(2001

appropriate. ) 801) of 22.5.01)

Evaluation Regulations Overall evaluation of 3 years European AIDCO report on 975 and activities financed by the after entry Parliament + actions 976/99 Commission under the into force Council financed in regulation, possibly of aforethe field of including proposals mentioned human rights concerning future regulations) and regulations (Art. 19). democracy.

Food Article 31 Report on activities in 2000 December European AIDCO security 2000 of (EC) 2001 Parliament + annual report Regulation Council

n° 1292/96 of the Council of 27 June 1996

Rehabilitation Art. 9 of Origin: Commission End of each European AIDCO

“Annual Regulation Summary of the activities budget year Parliament

report” No. financed in the course of 2258/96 that year and evaluation of + Council

the implementation of the regulation over that period. A summary of all external evaluations is included in the report

Summary of Art. 10 of Origin: Commission Not Appropriate AIDCO evaluations Regulation specified geographicall made No. y-determined

2258/96 committee to assist the

Commission

Overall Art. 11 of Overall EC evaluation of 30 European AIDCO evaluation Regulation activities financed by the November Parliament

N° 2258/96 Commission under the 1999)

Regulation together with + Council

proposals concerning the future of the Regulation, including it’s possible modification or termination

Forests Art. 11.1 of EC Summary of the 1 European AIDCO

“Annual Regulation activities financed in the September Parliament

report” No. course of that year and after each 2494/2000 evaluation of the budget year + Council

implementation of the regulation over that period. The report should also indicate the number of external evaluations carried out regarding specific areas.

Summary of Art. 11.2 of Origin: Commission Not Appropriate AIDCO evaluations Regulation specified geographicall made N° y-determined

2494/2000 committee

responsible

for

development

Overall Art. 12.2 of Origin: Commission 17 European AIDCO evaluation Regulation

N° Overall evaluation of

November Parliament 2004

2494/2000 activities financed by the + Council Commission under the (4 years

Regulation together with after entry proposals concerning the into force future of the Regulation, of the including its possible regulation) modification or termination.

Environment Art. 10.1 of Origin: Commission 1 European AIDCO

“Annual Regulation Summary of the activities September Parliament

report” N° financed in the course of after each

2493/2000 that year and evaluation of budget year + Council

the implementation of the regulation over that period. The report also indicates the number of external evaluations carried out regarding specific activities.

Summary of Art. 10.2 of Origin: Commission Not Appropriate AIDCO the Regulation specified geographicall evaluations N° y-determined made 2493/2000 committee

responsible for development (Art. 9.1 of Regulation N° 2493/2000)

Overall Art. 11.2 of Origin: Commission 17 European AIDCO evaluation Regulation Parliament

N° Overall evaluation of

November 2004

2493/2000 activities financed by the + Council Commission under the

Regulation together with proposals concerning the future of the Regulation, including its possible modification or termination.

HIV/AIDS Art. 10.1 of Origin: Commission End of each European AIDCO

“Annual Regulation Summary of the activities budget year Parliament

report” N° 550/97 financed in the course of that year and evaluation of + Council

the implementation of the Regulation over that period.

Summary of Art. 10.2 of Origin: Commission Not Geographical AIDCO the Regulation specified lyevaluations N° 550/97 determined made committee

responsible for development (Art. 8.1 of Regulation N° 550/97)

Overall Art. 11 of Origin: Commission (30 March European AIDCO evaluation Regulation 2000) Parliament

N° 550/97 Overall evaluation of activities financed by the + Council

Commission under the Regulation together with proposals concerning the future of the Regulation and, where necessary, proposals for amending it.

Population Art. 12.1 of Origin: Commission End of each European AIDCO

“Annual Regulation Summary of the activities budget year Parliament

report” N° 1484/97 financed in the course of that year and evaluation of + Council

the implementation of the Regulation over that period.

Summary of Art. 12.2 of Origin: Commission Not Geographical AIDCO the Regulation specified lyevaluations N° 1484/97 determined made committee

responsible for development (Art. 11 of Regulation N° 1484/97)

Overall Art. 13.2 of Origin: Commission (2 August European AIDCO evaluation Regulation 2000) Parliament

N° 1484/97 Overall assessment of operations financed by the + Council

Commission under the Regulation, which may include suggestions regarding the future of the Regulation and, where necessary, proposals for amending or prolonging it.

Drugs Art. 11.1 of Origin: Commission End of each European AIDCO

“Annual Regulation Summary of the activities budget year Parliament

report” N° 2046/97 financed in the course of that year and evaluation of + Council

the implementation of the Regulation over that period.

Summary of Art. 11.2 of Origin: Commission Not Geographical AIDCO the Regulation specified lyevaluations N° 2046/97 determined made committee

responsible for development (Art. 10 of Regulation N° 2046/97)

Overall Art. 12.2 of Origin: Commission (20 October European AIDCO evaluation Regulation 2000) Parliament

N° 2046/97 Overall assessment of operations financed by the + Council

Commission under the Regulation, which may include suggestions regarding the future of the Regulation and, where necessary, proposals for amending or terminating it.

Gender Art. 10.1 of Origin: Commission End of each European AIDCO

“Annual Regulation Account of the activities budget year Parliament

report” N° 2836/98 financed under this Regulation relative to + Council

integrating gender issues in Community development co-operation and of their outcome together with:

• - 

  a list of the projects (names of implementing partners and percentage of the operational cost financed by the Community)

• - 

  an evaluation (with figures) of the implementation of the Regulation over that period.

Summary of Art. 11.2 of Origin: Commission Not Geographical AIDCO assessments Regulation specified ly

N° 2836/98 determined

committee

responsible

for

development

(Art. 8 of

Regulation

N° 2836/98)

Overall Art. 11.2 of Origin: Commission 1 January European AIDCO assessment Regulation 2002 Parliament

N° 2836/98 Overall assessment of operations financed by the + Council

Commission under the Regulation, which may include suggestions concerning the future of the Regulation.

Anti-personnel landmines

No Regulation in force at this time. A Regulation proposal has been made and is expected to be adopted in the course of the year 2001.

The reporting requirements are expected to be the same as those of the above Regulations.

Internally displaced persons ALA

No Regulation in force at this time. A Regulation proposal has been made and is expected to be adopted in the course of the year 2001.

The reporting requirements are expected to be the same as those of the above Regulations.

General Affairs

Title Legal basis Type of report Periodicity / Addressee EC leading Deadline service(s)

Report to the Council Reports on EU aid to Various Council, AIDCO

Council and conclusions of Bosnia-Herzegovina dates Parliament

Parliament on 29 May 2000; and a report on the

Special Report Resolution by implementation of the

2/2000 on aid the Committee Court of Auditors' given by the on Budgetary recommendations

European Union Control on a

to Bosniareport by Bart REPORTS

Herzegovina Staes MEP COMPLETED

with a view to

restoring peace (A5- and the rule of 0389/2000)

law

Report to the Council Report to inform the End of 2001 Council AIDCO

Council on conclusions Council of the

Special Report 7373/01 of 22 measures taken by the

16/2000 by the March 2001 Commission on

Court of improving further the

Auditors on effectiveness and tendering efficiency of the procedures for tendering procedures service contracts for service contracts under the Phare under the Phare and and Tacis Tacis programmes, in programmes the light of the Court

of Auditors' report

Reports to the Council Progress reports on Council, AIDCO

Council, Regulation finalisation of the Parliament,

European 2802/98 delivery process, Court of

Parliament and problems encountered Auditors

Court of in the movement of

Auditors on the product, price levels, supply of food committed to the Russian expenditure, inflows

Federation in and outflows to the

1999/2000 Special Account and reporting mechanisms

Report to the Council Report on progress in After six Council AIDCO

Council on conclusions of implementing the months (by

Special Report 12 March recommendations of 12

19/2000 by the 2001 the Court of Auditors, September

Court of in particular 2001) and

Auditors on the concerning the use of thereafter management by performance once a year the Commission indicators, the first of the programtime after six months me of assistance and thereafter at least to Palestinian once per year society

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