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European Commission

MEMO

Brussels, 16 October 2012

Statement of Commissioner Piebalgs in reaction to the Eurodad report "Hitting the target?"

"Today is another great day for EU aid. After having been ranked in the top 5 of the most transparent donors worldwide, we are now confirmed as one of the most efficient and results-oriented as well. Eurodad's report clearly concludes that the European Commission is one of the best-performing donors when it comes to aid effectiveness principles. It compares specific programmes of six different donors and examines if they can deliver sustainable results in the long run. I am proud to say that the conclusion is a resounding success in terms of the work the European Commission does: in Eurodad's comparison, we achieve by far the best results.

The report has looked at a specific type of EU programme that we call "MDG contracts": These are "contracts" that we have concluded with eight governments in Africa in which we commit to providing budget support while the governments commit to speeding up the achievement of the Millennium Development Goals and make them a reality in their country. Most of the contracts finance improvements in health and education; the rest is used to make progress on access to water, agriculture production, business climate and infrastructure, public financial management, and social protection. Such funding has the great advantage of being predictable, oriented towards the long term, and giving government ownership of the strategy.

In times of crisis and budgetary constraint we must be able to prove that the aid we spend really makes a lasting difference and helps people out of poverty. It is great to hear from a neutral observer that the EU delivers on what we have set out to do. We are combining concrete results with pursuing the all-important principles of aid effectiveness.

In the future we will target our funds on the poorest countries and where they can have the highest impact. The Commission has also proposed that all EU donors, Member States and Commission, should programme more of their aid jointly, to harmonise their work and avoid any waste of resources.

This evaluation from an independent and respected organisation is also timely as discussions regarding the next EU budget, including aid, are on-going. This kind of scrutiny is crucial to secure a steadfast support from Europeans to aid: they can be ensured that thanks to EU aid, millions of people in the poorest countries have access to food, education, health services but also energy and roads. We are ready to continue to fulfil our responsibility on the global stage: fighting poverty and promoting democracy, peace, stability and prosperity. And I want to recall that aid is not a luxury but a smart investment on our common future."

Background

The report

The Eurodad report assesses the potential of six results-based approaches to deliver long-term and sustainable results by measuring the performance of different initiatives against aid effectiveness principles. These are principles developed and agreed by all international donors: Country ownership, mutual accountability, harmonisation and use of country systems.

MDG contracts

The EU is the biggest donor worldwide, representing 56% of global aid. The MDG Contract is a longer term, more predictable form of general budget support that the European Commission launched in 2008 at the start of the 10th European Development Fund. It is part of the Commission’s response to international commitments to provide more predictable assistance to developing countries. Up to 30% of the funding is linked to performance indicators. At least 15% of the committed funding is used specifically to reward performance for MDG-related outcomes, notably in health, education and water.

MDG-Contracts have a strong focus on the MDGs. About two thirds of indicators relate to the health and education sectors (three quarters when considering the financial weight of different indicators). Water, agriculture, business climate and infrastructure, public financial management, and social vulnerability accounting for the rest.

MDG-Contracts were agreed with 8 countries: Burkina Faso, Ghana, Mali, Mozambique, Rwanda, Tanzania, Uganda, and Zambia. Collectively these accounted for €1.8bn.

More information:

http://ec.europa.eu/europeaid/what/millenium-development-goals/contract_mdg_en.htm

Examples

Generally, the focus on indicators has helped to keep the momentum and focus on MDGs in governments' action. For example, in Rwanda, the reliability and predictability of EU aid has become the foundation for results achieved in fighting poverty and hunger, and maternal health. Between 2006 and 2011 poverty has dropped from 57% to 45%. With support from the EU, over the past 5 years maternal mortality rates have dropped significantly and the country is on track for meeting this MDG by 2015.

In Tanzania, the percentage of the population with access to electricity has increased from below 10% to 15% in recent years. The government has achieved a sustained vaccination rate of over 85% for diseases diphtheria, tetanus and hepatitis B.

In Tanzania, the MDG contract has also provided per-capita grants to government secondary schools with more than 1,6 million students to finance quality education materials.

The authors

Eurodad (European Network on Debt and Development) is a network of 50 non-governmental organisations (NGOs) from 19 European countries working on issues related to debt, development finance and poverty reduction. More information: http://eurodad.org/


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