Commission Staff Working Document:EU Report on Millennium Development Goals 2000-2004:EU contribution to the review of the MDGs at the UN 2005 High Level Event - Montesquieu Instituut

 

COUNCIL OFBrussels, 18 April

THE EUROPEAN UNION

8138/05 ADD2

DEVGEN 64 RELEX 172 ONU 46

COVER NOTE

from:

Secretary-General of the European Commission, signed by Ms Patricia BUGNOT, Director

date of receipt: 15 April 2005

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

Subject: Commission Staff Working Document: EU Report on Millennium Development Goals 2000-2004: EU contribution to the review of the MDGs at the UN 2005 High Level Event

Delegations will find attached Commission document SEC(2005) 456.

________________________

Encl.: SEC(2005) 456

 

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 12.4.2005 SEC(2005) 456

COMMISSION STAFF WORKING DOCUMENT

EU Report on Millennium Development Goals 2000 2004

EU contribution to the review of the MDGs at the UN 2005 High Level Event

{COM(2005)132 final}

TABLE OF CONTENTS

• 1. 

  Introduction................................................................................................................ 3
• 2. 

  Focus of EU development policies and instruments ............................................... 4

2.1. Development policies................................................................................................... 4

2.2. Aid effectiveness.......................................................................................................... 9

2.3. Policy coherence for development ............................................................................. 17

• 3. 

  EU Contribution to the MDGs 1-7 ......................................................................... 21

3.1. Goal 1: Eradicate extreme poverty and hunger.......................................................... 21

3.2. Goal 2: Achieve universal primary education............................................................ 25

3.3. Goal 3: Promote gender equality and empower women ............................................ 28

3.4. Goal 4: Reduce child mortality .................................................................................. 30

3.5. Goal 5: Improve maternal health................................................................................ 32

3.6. Goal 6: Combat HIV/AIDS, malaria and other diseases............................................ 34

3.7. Goal 7: Ensure environmental sustainability ............................................................. 37

• 4. 

  Implementation of MDGs 7 & 8 commitments ..................................................... 43

4.1. Goal 7: Ensure environmental sustainability of the EU............................................. 43

4.2. Goal 8: Develop a global partnership for development ............................................. 50

4.2.1. Official Development Assistance............................................................................... 50

4.2.2. Trade and development .............................................................................................. 60

4.2.3. Debt ............................................................................................................................ 70

• 1. 

  INTRODUCTION

In September 2005, the UN General Assembly will review the progress made by UN Members in the implementation of the Millennium Declaration, and the global development agenda agreed at the Millennium Summit of 2000. It will look at contributions of both developed and developing countries towards attaining the Millennium Development Goals (MDGs), and will discuss how to accelerate progress in view of ensuring that the MDGs will be reached by all countries by 2015 at the latest.

In preparation for this UN High Level Event the European Commission services have compiled this EU Synthesis Report. The report explains how the EU, as the world's biggest donor and major trading partner, has contributed towards past progress on the MDGs. The report is based on the national reports prepared in 2004 and 2005 by the EU Member States

1

and (in the case of the EC report) by the Commission2. It follows the common EU reporting

format agreed in June 2004.

This synthesis report describes the major contributions, efforts and activities of the EU and its Member States in support of the MDGs. It provides information on the extent to which the EU has focused its strategies, procedures and instruments on the achievement of the MDGs. It gives examples of specific EU contributions to MDG1-7. It sets out, in some statistical detail, what the EU has invested in the global partnership for development of MDG8 and in ensuring environmental sustainability within the EU (MDG7, target 9). Finally, it lists some specific actions that are currently foreseen to enhance the implementation of the MDGs. Through this report the EU aims to reconfirm to its citizens, its NGOs and civil society, its development cooperation partners and the global community at large its full and continued commitment to the MDGs. In this context the report also aims at raising public awareness and support and at stimulating debate on MDGs and the EU's responsibilities and capacities in this framework.

This synthesis report does not pretend to provide a complete picture of the EU contribution. The full description of the many initiatives of EU Member States is found in the national reports, which add up to more than 730 pages of text. The synthesis report does not aim either to attribute progress on MDGs to EU inputs. The EU is fully aware that if one donor builds a road, a second constructs a hospital and the third pays for doctors and vaccines, it is impossible to say which of them can claim to have brought down child mortality. As a matter of fact the EU would argue that all of them contributed, but that eventually the success can only be attributed to the developing country that implements the vaccination policy and programmes.

• 2. 

  FOCUS OF EU DEVELOPMENT POLICIES AND INSTRUMENTS

2.1. Development policies

2.1.1. Converging objectives

During the 1990's the policies and practices of development cooperation were gradually integrated into a new global development framework aimed at poverty eradication, promotion of gender equality, access to primary education, improving health and provision of other basic services, as well as sustainable development, and the establishment of global partnerships. The EU and its Member States have been major forces in this process.

In September 2000 world leaders from 189 nations agreed and signed the UN Millennium Declaration, binding them inter alia to a global project to decisively reduce extreme poverty in all its key dimensions. The Millennium Development Goals (MDGs) that derive from the development part of the Declaration provide an agenda for global action. This agenda and the outcomes of the World Social Summit, the World Summit on Sustainable Development, the Doha Development Agenda and the Monterrey Consensus are mutually supportive processes and essential building blocks of a worldwide partnership for sustainable development.

The EU has expressed its full commitment and dedication to the MDGs on several occasions.

In June 2004, immediately after the accession of ten new Member States, the European Council declared that `The Union must continue to strengthen its leadership role in the fight against global poverty. The European Council expresses its concern at the faltering progress towards the achievement of the Millennium Development Goals, especially in Africa. It reiterates that the EU will intensify its efforts to fulfil the commitments undertaken in Monterrey, including through the exploration of innovative sources of financing, and will strongly support UN attempts to accelerate progress towards the achievement of the Goals'

6.

The EU objective of poverty eradication and its commitment towards internationally agreed development objectives are also enshrined in the new EU Constitution

7.

EU Constitution

2.1.2. Alignment of EU development policies with MDGs

Since 2000 EU Member States and the Commission have made, or are in the process of making, an effort to better align their development cooperation policies and practices to the overall objectives of poverty eradication and the achievement of the MDGs. The national MDG reports give the full details on this process. The following are short extracts of what each of these reports say on this issue:

Austria: Austria's Development Co-operation Act 2002/2003 defines as general objectives the elimination of poverty, maintenance of peace and human security and protection of the environment. The rolling Three-Year Programme on Austrian Development Policy 2005-07 refers to the MDGs as the overriding orientation for development cooperation. Since 2000, Austria pursues the poverty reduction objective by prioritizing the poorest countries, especially needy regions and disadvantaged target groups. Strategy documents are under review to effectively enhance such a pro-poor policy.

Belgium: The Law on International Cooperation of May 1999 formulates the global objective of Belgian development assistance as "sustainable human development", to be achieved through poverty reduction based on a partnership approach. This coincides with the vision of the Millennium Declaration. Belgium concentrates its cooperation on a few selected

domains: basic health care including reproductive health, basic education, agriculture and food security, basic infrastructure and the reconstruction of society. Gender equality and the empowerment of women, social

economy and environmental sustainability are considered

cross-sectoral themes.

Czech Republic: In January 2002, the government adopted the Concept of Czech ODA for 2002-2007,

defining principles and priorities of development cooperation, and adopting a

multidimensional approach to the concept of poverty reduction. In April 2004, the government approved the new Guidelines for Providing Development Assistance that regulate the co-ordination and management of aid.

Cyprus8: Cyprus development cooperation is provided in the form of technical assistance and

humanitarian aid, especially in the field of vocational training in Africa. Cyprus is in the final stage of establishing the appropriate legal framework.

Finland: The Resolution on Development Policy of February 2004 reaffirms Finland's commitment to the Millennium Declaration and the MDGs, and provides an updated framework for the implementation of development cooperation. Eradication of extreme poverty has been articulated as the overarching objective of development cooperation, in line with the MDGs. The new Development Policy gives increased emphasis to policy coherence, value added and partnerships with non-state actors, with a particular focus on new initiatives to promote private sector involvement and cooperation between institutions.

France: France aims at a precise focusing of its development cooperation on the achievement of the MDGs. With this view, the Interministerial Committee for International Cooperation and Development decided in July 2004 to have a more selective country programming and better focused sectoral strategies. In consistency with the MDGs, these multiannual strategies will focus on basic education, water and sanitation, health and AIDS, agriculture and food security, development of infrastructure in Sub-Saharan Africa, environment and biodiversity.

Germany: The Millennium Declaration, including the MDGs, guide the medium-term design of German development cooperation. Poverty reduction, peace building and achieving justice in globalisation are the main goals of German development policy. The German government's Program of Action 2015, published in April 2001, describes German contributions to the Millennium Declaration and provides a development policy framework for the fight against poverty. The MDGs are embodied in the objectives of German development policy.

Greece: The legal basis for the Greek development cooperation was established by law in 1999. The objective of poverty reduction and the achievement of the MDGs are at the core of Greece's development policy. The current policy framework specifies sectoral and geographical priorities, where Greece can provide comparative advantages. A series of key priorities for future action are identified in this context, including health, primary education and gender.

Hungary: The Concept Paper of the Hungarian development co-operation policy of July 2001 sets out the institutional, legal and financial framework of Hungarian development cooperation. Poverty reduction is Hungary's principal development goal, and its policy concentrates on areas where Hungary can offer comparative advantages, such as transition processes, education, health, agriculture and water management.

Lithuania: The government of Lithuania approved in May 2003 a Policy Paper for the provision of development assistance for the period 2003-2005. The overall objectives of Lithuanian development cooperation policy are based on the Millennium Declaration.

Luxembourg: Poverty reduction and sustainable development are key objectives in Luxembourg's development cooperation programme. Luxembourg seeks to contribute to the achievement of the MDGs. Its development cooperation action concentrates on the areas of education, basic health, water as well as rural development. Special emphasis is also given to gender, environment and the transfer of knowledge.

Malta9: Malta's objectives and priorities for development co-operation policy are based on

the goals set out in the UN Millennium Declaration. Malta has recently established a Unit for Development Cooperation within the Ministry of Foreign Affairs and is in the final stage of developing a comprehensive development policy.

Netherlands: In the policy memorandum Mutual Interest, Mutual Responsibilities: Dutch development cooperation policy for the coming years of October 2003, the Dutch government confirms the central role of sustainable poverty reduction in its policy, stating that the MDGs are the means to achieve this objective. Development cooperation concentrates on four priority themes: education, sexual and reproductive health and rights, fight against HIV/AIDS and environment and water.

Poland: The Strategy of Poland's Development Co-operation of October 2003 mentions poverty reduction and sustainable development as its overriding objectives. The Strategy outlines the future institutional system of aid policy and management structure that is envisaged to be in force as from 2005.

Portugal: Portugal has been pursuing its development policy in line with the MDGs. With a view to achieve the ultimate goal of reducing poverty, Portugal's priorities are on education, health, governance, civil society and social services. Portugal focuses its aid on the least developed countries, mainly the five Portuguese-speaking African countries and East-Timor.

Slovak Republic: The establishment of the Slovak Republic aid mechanism was completed in 2003, and now includes strategic documents, an institutional structure, human resources and a legal framework. The Slovak Medium-Term Strategy sets the basis for a Slovak development cooperation programme. The Slovak Republic gave its unconditional support to the MDGs.

established by current international commitments, and is in line with the Spanish Law on International Cooperation for Development passed in 1998.

Sweden: Sweden's Policy for Global Development, adopted by Parliament in December 2003, has a single common goal for all policy areas: to contribute to equitable and sustainable global development. It forms the basis for a coherent Swedish policy for global development. This overall policy has the aim to contribute to the fulfilment of the Millennium Declaration and the MDGs. In the particular context of development cooperation Swedish policy efforts are targeted at contributing to an environment supportive of poor people's own efforts to improve their quality of life.

United Kingdom: The UK Government has expressed its commitment to the reduction and elimination of poverty through international partnership. Its development policy is focused around efforts to accelerate progress towards achievement of the MDGs. The Department for International Development (DFID) has made the MDGs the main focus of all its work. Development policy is set out in a series of White Papers and through the International Development Act, which came into force in June 2002, and which establishes the legal basis for UK development assistance.

European Community: Since November 2000 the Community has had a single overall framework which guides its development policy and cooperation with developing countries

10.

The EC policy statement is compatible with the Millennium Declaration objectives and orientations, in particular with the overall objective of the reduction and eventual eradication of poverty. In early 2005, the Commission has initiated a process to review the 2000 development policy statement, in view of further enhancing its effectiveness and its alignment with internationally agreed commitments, including the MDGs.

2.1.3. Measuring progress towards the MDGs

As explained in the introduction of this report, the EU does not aim to attribute progress on MDGs to specific donor inputs. EU policies can contribute to establishing the right basis and providing the necessary means to allow developing countries to achieve the MDGs. But eventual progress is made by developing countries, not by donors.

From 2003 onwards the Commission started to use the ten key indicators to assess the performance of the countries and regions where it provides development assistance

• 12. 

  In order

to further focus on the outcomes in relation to the MDGs, the Commission has also put in place indicator frameworks and established a methodology for measuring progress in health and education in the countries where these are given support by the EC. All indicators are progressively being incorporated into Country Strategy Papers (CSPs) through the annual and mid-term reviews, to ensure a more systematic analysis of results achieved in terms of poverty reduction.

While useful as a measuring tool, indicators do not tell the full story. Not everything can be measured. MDGs are closely interrelated, and development strategies rarely target just one objective. To give just a few examples: combating HIV/AIDS is impossible without addressing women's empowerment as a central concern. Reducing the proportion of people living in extreme poverty or suffering from hunger requires sustainable water use in agriculture and combating land degradation. Lack of access to clean water and sanitation has a major impact on health, notably child mortality, and adds to the burden of already strained public health budgets.

Moreover, it should be underlined that many EU interventions contribute to creating a conducive climate for achieving the MDGs, although they are not reflected in any of the indicators mentioned above. Yet, these interventions are essential to accelerating progress towards the MDGs. Examples: the EC and other Member States' choice to provide a larger share of its assistance in the form of budget support allows the financing of recurrent costs, and gives the EU a stake in discussions on government budget priorities. The fact that an important proportion of EC development cooperation is targeted at the transport sector helps developing countries to create an indispensable infrastructure basis for economic development and effective delivery of basic services.

It is also clear that the MDGs cannot be achieved in conditions of chronic insecurity, which is often linked to government failures. The importance of assisting partner countries in addressing the root causes of conflict at the earliest possible stage has been promoted by the EU in recognition of the links between governance, peace, security, environmental resources and development.

There is a strong EU commitment to enhance the quality and effectiveness of aid. Issues that are mentioned in the national MDG reports include: coordination of donor policies; ensuring complementarity and avoiding duplication between donor interventions; harmonisation and simplification of donors' procedures, strategies and activities; aligning aid with developing countries' priorities, procedures and practices; ensuring rationalisation to reduce transaction costs and administrative burden for developing countries; apply lessons of best practice.

2.2.1. Converging objectives

In March 2002, the European Council in Barcelona adopted a series of commitments to increase the quantity and quality of EU development assistance (see section 4.2.1. of this report). One of these so-called Barcelona commitments focuses on aid effectiveness. It called on the EU and its Member States to `improve aid effectiveness through donor coordination and harmonisation, and take concrete steps to this effect before 2004'.

Since 2002, the majority of Member States, as well as the Commission, have reformed the way they prioritise, organise and implement their external assistance. Nevertheless concrete implementation of political commitments is not yet concluded. Within the context of the OECD/DAC, the EU has been working towards a credible and ambitious "EU fast track" to implement the Barcelona commitment on aid effectiveness. In November 2004, the EU Member States adopted an EU Action Plan for coordination and harmonisation

13.

The international process on coordination received a strong impetus through the second High Level Forum on Aid Effectiveness (HLF II) of Paris in March 2005

14, which provided a

comprehensive agenda for immediate implementation.

Paris High Level Forum

At the Paris High Level Forum on "Aid Effectiveness: Harmonisation, Alignment and Results" in March 2005, international donors and aid recipients agreed on monitorable commitments related to ownership, harmonisation, alignment, results and mutual accountability.

2.2.2. Complementarity, coordination and harmonisation

The MDG reports indicate that EU Member States development cooperation strategies are increasingly based on developing country's national poverty reduction strategies or similar frameworks

• 15. 

  Poverty Reduction Strategy Papers (PRSP) and national poverty plans provide

the operational framework for making progress towards the MDGs at country level. Priorities for poverty reduction are identified, agreed and monitored through participatory processes. This improves policy dialogue with developing countries, partner ownership and leadership of the development process and aid programming. Several EU donors also support the partner authorities in the definition, implementation and evaluation of national plans for poverty reduction. Countries like Belgium and France report that they provide expertise. Austria contributes, where appropriate, to the elaboration of poverty assessments at the regional level as well as to household surveys at the local level.

Good practices and cases of operational complementarity between EU Member States and Community are developing on an ad hoc basis in the field, but several MDG reports indicate that more can and should be done. Most EU donors have recently increased concentration by focusing on fewer priority partners and sectors. This process, which in itself enhances aid effectiveness, also increases the risks of duplication and/or gaps. Questions on donors' added value and division of labour are therefore increasingly important. To facilitate debate on these issues the Commission has produced an EU Donor Atlas, summarising information on donor activities and modalities.

The objective of strengthening complementarity is also reflected in national legislation and policy documents of EU Member States. For instance, the new Finnish Resolution on Development Policy explicitly states that Finland must consider the value added it can contribute to international development and potential sectors of support. The Greek national action plan for coordination and harmonisation identifies areas of comparative advantage. Other donors, such as the Netherlands, Portugal and Spain, report that they equally focus their development assistance on sectors or partners where they can offer comparative advantages. Similarly, the new EU Member States, committed to use limited resources in the most efficient way, have set clear targets and preferences on partner countries and sectors.

EU pilot initiative

A report16 assessing progress towards donor harmonisation in the field showed strong improvements

in Mozambique, Vietnam and Nicaragua, but slower progress in Morocco.

Mozambique: EU donors have notably: aligned on the Poverty Reduction Strategy, established a joint Memorandum of Understanding with 15 donors (leading to coordinated and untied budget support), widely used SWAP/sectoral programmes, established joint performance assessment framework.

Vietnam: EU donors have agreed on a joint Action Plan for harmonisation and co-ordination and have already delivered in particular: the establishment of common EU norms for local costs in development activities (followed by other donors), an annual directory of EU co-operation activities, or Framework Agreement for co-operation, for instance on tax status for consultants; EU working groups on how to work more effectively in key sectors.

Nicaragua: A 10-donor Joint Financing Agreement to support the National Development Plan is under negotiation, and is expected to produce a positive result for the 2005 budget. Opportunities for greater harmonisation will improve as the Plan becomes better linked with the national budget. Donors work in sector co-ordination groups.

Morocco: Donors regularly meet to discuss harmonised procedures and exchange information on macro-economic and sectoral data. There have been concrete improvements in donor harmonisation in the water sector.

As a similar follow-up to the Barcelona commitments, the EU took also specific initiatives in the area of health and education.

EU initiative on education

In 2003, the European Commission, in close collaboration with EU Member States education experts, elaborated 10 indicators to monitor donors' progress at country level towards harmonising and aligning their policies and procedures in the field of education. This EU initiative was presented to the Education for All Fast Track Initiative in March 2004. In this framework, the EU is financing a trial phase in view of implementing this indicator approach to harmonisation at country level.

`Nordic+' initiative in Zambia

In 2003, the `Nordic+ countries' signed an agreement with Zambian authorities on how to improve and coordination and efficiency and harmonise procedures in the field

. A joint pilot mission to Zambia

explored opportunities for harmonising procedures in the field. The mission formulated an action plan of progressive harmonisation. In April 2004, a follow-up mission reviewed the progress made thus far.

Since the agreement was signed, the Zambian government has taken ownership of the process and in March 2004 a new agreement was signed between Zambia and a wider group of ten donors ( Germany,

the World Bank and the UN joining the newly developed action plan).

Amongst new EU Member States, cooperation between the Visegrád countries (Czech Republic, Hungary, Poland and Slovakia) contributes to more coordinated and effective development assistance and cooperation programmes for these countries. Trilateral projects, also involving other more experienced donor countries, should contribute to a further accumulation of knowledge within these emerging donor countries.

Despite these and other examples, the European Commission and several EU Member States have stated in their MDG reports that the coordination and harmonisation agenda should be taken forward more quickly. In cases where strong national leadership has forced the pace of increased donor coordination, such as in Uganda and Mozambique, significant progress has been made in coordinated budget support and coordination of donors programmes in the education and health sectors. These examples should inspire similar progress elsewhere.

2.2.3. Budget support and result oriented assistance

Currently EU Member States provide development assistance in a number of different ways, ranging from direct support to government programmes through financing of the government budget, to small scale financing of NGO action.

EU Member States recognise and promote the idea of government leadership in developing and securing financing for poverty reduction, and the Commission and a number of Member States have reported that they consider general budget support as the most effective way of giving a government the necessary fiscal space to plan resources according to nationally defined needs.

Spanish participation in new aid modalities such as basket funding or budget support has so far been limited, but steps have been taken to rectify this (for example, Spain has recently signed Mozambique's health SWAP).

Greek aid is implemented mainly through small projects and programmes, but it reports that the use of targeted budget support, as a means of assistance to national poverty reduction strategies, will be steadily increased in the future.

In Finland's 2004 Development Policy, increased programme-based cooperation (sector wide, PRSP-budget support) will be increased. The Finnish report announces guidelines on budget support and training on programme-based cooperation.

In its programmes with other donors, Germany concentrates on sectoral programmes (Sector Wide Approaches, basket funding) in co-financing PRSPs and other forms of budget support.

Where the environment is favourable, Belgium is considering various forms of budget support.

France adapted its procedures to allow rapid budget support. In this context, France has assisted e.g. Burkina Faso to better integrate PRSPs in national budget planning.

The Danish report confirms that when national conditions allow, Danish aid can be provided as general or sector budget support.

Budget support in health and education

A consultation of EU Member States health experts convened by the Commission in September 2004, concluded that a valuable lesson emerging from those countries that are making good progress towards the MDGs, is the importance of having a sound and comprehensive national health plan, behind which both government and its development partners can rally. The view expressed by several Member States is that budget support is the best way of supporting nationally developed plans. However, given the difficulty some donors have in providing budget support, the initial emphasis may need to be on all development partners buying into a nationally owned plan, and supporting it with, if necessary, a variety of aid instruments. A similar conclusion emerges from education, where EU Member States experts have developed a methodology using indicators enhancing a move from off-budget project support to budget support for national education plans.

The Netherlands has developed a monitoring system that will closely monitor project performance, sector performance and country performance for each partner country against the backdrop of that country's progress in reaching the MDG targets.

The French MDG report mentions that France will adapt its methods of cooperation in the light of the recipient country's capacity to manage international aid, using result based management.

Sweden strives for more result oriented development assistance, by increasing programme support instead of supporting individual projects, and applying new guidelines, that link budgets support to poverty reduction outcomes.

EC Result based approach

The increased focus on development results in EC development assistance is reflected in country strategy papers, budget support programmes and projects. Since 1999, the EC has linked its budget support programmes in ACP countries (and, more recently, its sectoral budget support in some MEDA, Asian and Latin-American countries) to the evolution of key outcome indicators drawn from the national Poverty Reduction Strategy Papers, such as child vaccination, girls' equality in primary enrolment, primary school completion rate. This shift to outcome-based conditionality not only ensures that levels of EC aid reflect countries' achievements in poverty reduction, but also aims to strengthen the focus of partner governments on results, and to ensure ownership of policy choices. At the project level, the Commission conceived an improved results-oriented monitoring system. The main objective is regularly (on average every 12 months) to gather results-oriented information on projects in the field and to report on progress.

2.2.4. Untying of aid18

Two recent studies commissioned by the OECD/DAC and the European Commission have highlighted in parallel the added benefit and positive impact of further untying - in particular the untying of food aid and food aid transport in terms of effectiveness

19, and the coherence of

aid. It is generally recognized that untying aid makes it more efficient, reduces administrative burdens, and increases the ownership of the developing country.

applies to EC food aid, which favours local and regional purchases and thus provides an important outlet for local surpluses.

Proposals for further untying EC aid are currently in the legislative process. In line with the conclusions adopted by the General Affairs Council in May 2003 and the European Parliament in September 2003, the Commission submitted to the Council and the Parliament two proposals, for tentative adoption in 2005: (i) one for a Regulation on untying of EC- funded aid (beyond the OECD/DAC recommendations) - to include nearly all developing and transition countries, and with the possibility of full untying to non-EU donor countries on condition of reciprocity and (ii) one for the renegotiation (now concluded) of the Annex IV of the Cotonou Agreement (while maintaining the existing system of price preferences in the EU-ACP framework).

In their national MDG reports the EU Member States summarise their commitments towards the untying of their aid as follows:

Belgium advocates the untying of aid both in relation to procurement and the use of national experts. This position has been incorporated in the latest Government Agreement on Development (2003). In practice, Belgian aid has been gradually untied and is almost totally so since 2000. Today, only one programme of country-to-country loans (for non-LDC countries) still involves tied aid.

As a definite step towards untying development assistance, the Danish Government decided that as of January 2004 the rules contained in EU procurement directives are to be applied when goods, services and construction projects are purchased by Denmark for development assistance purposes.

Estonian bilateral development aid, which mostly consists of technical assistance, is untied.

Finland has made efforts towards wider untying and is ready to continue discussions on this issue.

All aid provided by the French aid agency Agence Française de Développement is untied as from January 2002.

Both programmes are supporting development-related export transactions by Dutch companies.

Portuguese ODA is composed above all of debt relief and technical cooperation, and therefore to date, examples of aid related to the financing of projects and programmes have been few in number and low in value. Tied aid has essentially entailed the funding of small projects and the provision of support programmes involving the import of consumer goods or equipment.

Spanish ODA is increasingly untied, due to the decreasing share and evolving nature of FAD credits (Fondo de Ayuda al Desarrollo / Fund for Development Assistance), which happened to be the main source of Spanish tied aid.

Swedish aid is largely untied. Its food assistance is fully untied.

All UK bilateral aid is fully untied. Under the International Development Act of 2002, the sole purpose for which development assistance can be provided is to promote sustainable development and improve the welfare of poor people. Under the restrictions of the Act, aid cannot be `tied' to the purchase of British goods or services.

2.3. Policy coherence for development

The obligation to `take account of the objectives of Development Co-operation in the EU policies that are likely to affect developing countries' is embedded in the EC Treaty (art. 178). The new EU Constitution upholds this commitment to coherence in even stronger terms.

EU Constitution

`(...) The Union shall ensure consistency between the different areas of its external action and between these and its other policies' (art. III - 292).

`(...) The Union shall take account of the objectives of development cooperation in the policies that it implements which are likely to affect developing countries.(...)' (art. III - 316).

It is generally acknowledged that an effective improvement in the coherence of developed countries' policies would put developing countries in a much better position to achieve the MDGs. The EU, for its part, gives continued attention to the need to ensure that all domestic and external EU policies are consistent with and conducive to agreed international commitments and do not undermine the objectives of development cooperation. EU policies are now regularly evaluated and proposals of policy changes are subject to impact assessments. Policy measures are consequently adjusted, to strike a better balance between the diverse interests at stake.

EU and/or Community policies show that the EU is seeking to improve the coherence of its policies with respect notably to impacts on developing countries.

· With regard to the Common Fisheries Policy (CFP), the coherence issue is particularly

relevant in the context of fisheries agreements with developing countries. As part of its CFP reform proposals the Commission issued in December 2002 a Communication on an "Integrated Framework for Fisheries Partnership Agreements with Third Countries"

• 21. 

  The

Commission proposed that EC bilateral fisheries relations involving a financial contribution gradually move from access agreements to partnership agreements with a view to contributing to responsible and sustainable fishing in the mutual interest of both parties. The communication explicitly refers to the need to ensure coherence between the CFP and other EC policies in the external field, in particular development cooperation. The Commission contracted external experts to perform evaluations, impact analyses and monitoring services. These tools will allow systematic and constant monitoring of the impact of the fisheries agreements.

· Since the early 1990s, the EU has embarked on a process of reform of the Common

Agricultural Policy (CAP) with a view to reducing market imbalances and trade distortion, limiting spending and addressing societal expectations in the areas of environment, rural development and food quality and safety. The speed and scope of this process have been intensified by the reform adopted in June 2003, which constituted a major shift from support to products towards support to producers' income, while further integrating sustainability concerns and limiting expenditures. This will lead to an increased proportion of EU domestic support through minimal trade distorting mechanisms, and hence reduced risk of impact on developing countries.

In the specific case of cotton, the EU adopted in 2004 a reform, which marks a substantial change in the importance and nature of its support mechanism. This will significantly decrease its potential trade distorting nature. Trade effects, however, are marginal, considering that the EU only accounts for 2% of world cotton production. The EU is committed to monitoring the impact of its reform on cotton production and trade. The EU and African countries also engaged into a partnership encompassing trade and development (Paris, July 2004), with a view to the fair development of the African cotton sector.

their emphasis on promoting regional integration, strengthening regional markets and institutions, promoting sustainable development, promoting diversification and developing supply side capacity to increase exports.

To effectively enhance policy coherence for development in the area of trade, specific coordination mechanisms have been established. Examples include the Joint Expert Group on Trade and Development, involving both Member States and European Commission.

· In the field of food safety, the EU is aware of the difficulties that more stringent EU

regulations may impose on exporters in developing countries. Food safety has become a priority of the European Union, responding to the legitimate concerns of its consumers. Several programmes have been implemented to raise the awareness of public authorities and the private sector in developing countries regarding the trade implications of such measures and to help these states through technical assistance to overcome the potential difficulties of complying with EU sanitary and phyto-sanitary (SPS) requirements.

· Seen from the development perspective migration is first and foremost an issue between

developing countries themselves. More than 80% of the world's international migrants (both refugees and labour migrants) move from one developing country to another. Trying to assist these people where necessary is and remains an important aspect of the EU development agenda. Beyond the development agenda, EU policies on migration also have an impact on developing countries. In recent Council conclusions the EU has expressed concern with issues such as migrant remittances (where globally formal flows alone have now reached almost twice the value of ODA), brain drain (particularly relevant in certain countries and sectors, e.g. the health sector in sub-Saharan Africa), the promotion of circular migration and cooperation with the diaspora.

EC Impact Assessments: a tool to improve policy coherence

The decision making process within the Commission, which associates Commissioners in charge of all portfolios, including development, already offers a certain degree of guarantee regarding the coherence of new Commission proposals. As part of a comprehensive "Better Regulation" package

23,

the Commission has introduced the tool of Impact Assessment, applicable to all major proposals envisaged by its services. It contributes to improved coherence of measures under preparation, as it associates all relevant Commission services to the analysis, and consults potentially affected stakeholders as regards different scenarios for the policy goal to be achieved.

Sweden - Policy for Global Development

The policy aims to coordinate other policy areas and to utilise the synergy effects that such coordination produces. It explicitly intends to contribute to equitable and sustainable development and the achievement of the Millennium Declaration and the MDGs. Sweden is one of the first countries in the world to formulate such a comprehensive policy.

Progress on the implementation of the policy is reported to Parliament through annual reports, where each Ministry explains how its political decisions have contributed to equitable and sustainable global development. A citizen's forum with representatives from the parliamentary parties, the government, authorities, non-governmental organisations, private sector, researchers, groups of experts and other interested parties will be set up with the aim of promoting a broad public debate on the Swedish policy.

The policy favours independent evaluations of the Swedish development assistance, based on the recognition that rich countries, like developing countries, should be subjected to international and domestic scrutiny with regard to policy and the implementation of pledges.

Sweden also supports the ongoing work to develop a Commitment to Development Index, that can be used as a tool for international efforts towards a more effective global policy.

Several other EU countries have taken specific initiatives to strengthen the coherence of their domestic policy making process. In Germany, all new legislative proposals are assessed in terms of development considerations. A number of Member States have strengthened collaboration across different government ministries (for example, Austria and the UK) and inter-Ministerial commissions have been set up (for example, in Hungary and Portugal) to ensure policy coherence for development. In Finland the high importance attached to coherence is reflected in the Minister's portfolio covering both trade and development. Since the mid-1990's, the Netherlands has been particularly active in trying to make policy coherence a central element of the development agenda:

The Netherlands - Institutional arrangements

The Netherlands is one of the EU countries where the Minister for Development Cooperation has full cabinet status.

In 2003 an Informal Network on Policy Coherence for Development (PCD-network) has been established. This network aims to facilitate closer collaboration between the main stakeholders on policy coherence in the Member States (i.e. the Development Cooperation departments and/or the EU Coordination Departments) and the European Commission (DG Development).

• 3. 

  EU CONTRIBUTION TO THE MDGS 1-7

There is a distinct difference between MDG 1 to 7 and MDG8. While each of the first seven goals looks at a specific aspect of poverty, the 8

th goal is about establishing a true partnership

between rich and poor countries. The EU contribution to the latter can be assessed in relatively precise terms, but as MDG 1-7 have to be achieved in developing countries the EU input is by definition indirect. The EU Member States' MDG reports generally recognise that attempts to attribute the evolution of MDG 1-7 indicators to particular donor inputs would be artificial and contrary to the practice of ownership and partnership. Rather than measuring donor performance, this section will therefore identify the specific policies, guidelines and initiatives that the Member States and the Commission have put in place to assist developing countries achieve MDG 1-7.

One generic element of this assistance is to try to support developing countries in monitoring their own progress towards achieving MDG 1 to 7. However, as mentioned in several national MDG reports, to date the quality of data (including disaggregation by sex and by regions) available at international and country level remains a major issue of concern.

Improving quality and reliability of data

Several EU Member States as well as the Commission have engaged at the international level in initiatives to improve data availability and quality. PARIS21, a partnership of data producers, users, and analysts from developing countries, bilateral donors, and multilateral institutions, aims to encourage and assist all countries to design and implement a National Strategy for the Development of Statistics by 2006

. The EC has co-financed, together with DFID and the World Bank and in the

framework of PARIS21, a study which has illustrated various weaknesses of the current dataset and highlighted possible areas of immediate improvement. Support was also provided to the UNESCO Institute of Statistics to build up statistical capacity for measuring the education MDG indicators in a number of LDCs, in particular in Sub-Saharan Africa; to the Health Metrics Network, whose secretariat is based in the WHO, and which focuses on strengthening health information systems in developing countries; and to the establishment of Food Security Information Systems in different countries.

3.1. Goal 1: Eradicate extreme poverty and hunger

If projected growth remains on track, global poverty rates will fall to 13 percent less than half the 1990 level. Rapid progress is being made in Asia and a return to pre-transition poverty levels in Eastern Europe and Central Asia may be feasible. But present trends see no alleviation of the burden of poverty in Sub-Saharan Africa, where more than 360 million people continue to live on less than $1 a day

Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day

Target 1

24.

Poverty Reduction is the overarching aim of EU

development cooperation. EU Member States and the Commission contribute to the fight against poverty in particular through support to the implementation of poverty reduction strategies, as Austria, Denmark, Finland, France, Germany, Sweden, the UK and the Commission mention in their reports. Those strategies integrate the multiple dimensions of poverty and are based on the analysis of needs, constraints and opportunities in individual developing countries.

Poverty reduction strategies should also be encouraged in middle-income countries where the proportion of poor people remains high, as it helps to focus the attention of governments and donors on the need to develop pro-poor policies. While making progress on achieving several of the MDGs, many of these countries also show growing inequalities in income and access to social services.

Regarding the allocation of resources, the point of departure is that EU development cooperation concerns all developing countries. Nevertheless, the least developed countries and low-income countries should be given priority in an approach which takes into account the needs of people, the commitment and performance of governments and other actors to reduce poverty, and capacity of developing countries to absorb aid. Denmark, Finland, Greece, Ireland, Luxembourg and Portugal in particular mention their willingness to focus their aid on low income countries and on a limited number of sectors, in order to achieve a greater impact on poverty reduction. For example, over 80% of the Irish bilateral aid programme is targeted at the poorest continent, sub-Saharan Africa, primarily on six countries.

EU poverty reduction Mozambique

In 2001 Mozambique adopted the Plano de Acção pela Redução da Pobreza Absoluta (Plan of Action for the Reduction of Absolute Poverty, PARPA) as its central strategy for poverty reduction. Eleven EU Member States and the EC are providing support to the implementation of the PARPA in the form of budget support. This support should represent approximately $161m in 2005, equivalent to around 65% of total budget support disbursement to Mozambique for that year. No automatic link can be drawn between EU budget support and the results of Mozambique's policies. However, the macro- economic framework provided by implementation of the PARPA, to which the budget support has contributed with grant financing of about 3,7% of GDP, has supported sustained economic growth (over 7% per annum) and sharply reduced poverty (the share of the population living on less than $1/day is estimated to have fallen from 38% in 1996-97 to 20% in 2002-03).

In the context of poverty eradication, the focus should also be on support to pro-poor growth and job creation. France, Germany and Hungary in particular mention the need to create a business-enabling environment, to support energy, transport and micro-finance. The UK, France and Germany, together with the World Bank, co-finance a work program on 14 country case studies and a synthesis report on How to Operationalise Pro-Poor Growth. The UK mentions in particular OECD DAC's Practitioner's Primer on Accelerating Pro-Poor Growth through Support for Private Sector Development. The EC supports the promotion of decent work in its Communication on the social dimension of globalisation

26.

Germany Micro finance programmes

In addition to the strengthening of formal financing systems, Germany supports informal and semiformal decentralised finance institutions. German development aid promotes microfinance projects with a volume of

395 million for ongoing projects in financial cooperation and 20 million

yearly for technical cooperation.

The support is directed first and foremost at the strengthening of microfinance institutions with a view to rendering them more professional. In this way, new small finance circles are created and, in turn, successfully associated with the formal bank and finance institutions. Provision of access to loans leads to a reduction in dependence on informal money lenders who charge extortionate interest rates.

In this way, additional earning opportunities are opened up to the poor. Microfinance services allow for investment in education and the future of children, enhance the economic and social position of women and contribute to diversifying household income. Finally, microfinance projects can lead to an improvement in social commitment through organisation of members into `self help' groups which undertake social, economic and cultural tasks over and beyond those of financial management. This leads to an expansion of the political influence of their members.

Worldwide current estimates are that some 800 million people were undernourished at the turn of the century in developing countries. Although there have been reductions in Asia and the Pacific and in Latin America and the Caribbean, numbers continue to rise in Sub-Saharan Africa, in the Near East and North Africa. Civil conflicts, adverse climate conditions, particularly drought, environmental degradation and, in many of these countries, the HIV/AIDS pandemic are major contributing factors to this poor performance.

Halve, between 1990 and 2015, the proportion of people who suffer from hunger

Target 2

The Community is engaged in the fight against hunger by means of a comprehensive and broad based policy for sustainable development and poverty reduction at the national level. Where necessary, this policy is also extended to regional or sub-national levels, notably in those countries where widespread malnutrition coincides with a positive food balance on the national level. The policy brings the issue of food availability, access to food, responses to food shortages and nutritional problems to the centre of poverty reduction strategies. In addition, it tries to tackle the political dimensions of food insecurity, by promoting good governance, preventing conflict and building peace.

EU Member States are increasingly including food security among the top priorities of their poverty eradication strategies. For the UK, poverty reduction frameworks are a way of linking food and poverty analysis with public policies and actions. In this context, the UK is involved in the design and funding of a `food safety net' in Ethiopia. To promote awareness in its own country, in 2004 the Austrian government organised an information campaign on food security in collaboration with civil society organisations. Germany is particularly active in the field of food security and is contributing towards the recognition of the right to food and the implementation of the `Good Humanitarian Donorship' principle. It puts the accent on access to food and not only on availability and production aspects. With the adoption of the `Berlin Statement', the Berlin conferences on `Politik gegen den Hunger' in 2003 and 2004 marked an important step in the evolution of food aid policy.

The fact that three quarters of poor people live in rural areas has motivated countries like Finland and France to make rural development a priority in their cooperation programmes. Support to the agricultural sector features in several Member States programmes, particularly favouring small farmers. The better management of natural resources is also an objective in the strategies of several Member States, for example for Greece.

sustainable development and the fight against poverty. In this context, food aid is dissociated from the management of agricultural surpluses and is more firmly linked to development concerns. The option of triangular and local purchases of food aid was also introduced.

The EC policy is underpinned by a Food aid/food Security Budget Line of roughly 450m per year, which currently assists some 30 particularly vulnerable countries around the globe to overcome problems of temporary food shortages, to manage post-crisis situations, to ensure the link between relief, rehabilitation and development (LRRD) and to address structural food security problems. Food security is also addressed as an overarching objective of development policies, strategies and programmes financed from Budget Lines and European Development Fund resources within the EC's Country Support Strategies. Furthermore, ECHO dedicates a sizeable part of its annual budget of roughly 600m to emergency inputs and supplies, including food aid.

EC Food Security Programme

The EC Food Security Programme (FSP) adopts a long-term approach linking food security policy to poverty reduction. In countries where poverty results in insufficient access to food at household level, the FSP provides targeted budget support to key social expenditure programs, which have an important bearing on poverty reduction and food security. The advantages of such budget support include the possibility to promote a pro-poor reform agenda through policy dialogue, while operating within the single framework of the state budget. It also enhances feasibility of PRSP implementation against the background of a tight fiscal environment.

3.2. Goal 2: Achieve universal primary education

Ensure that, by 2015, children everywhere, boys and girls alike, will

be able to complete

a full course of primary schooling Eight out of ten children in developing countries begin primary school but in many of the poorest countries less than half of them complete their primary schooling and the drop out rates are even higher for girls. Some 103 million children are still out of school and an estimated 70 countries are off track in achieving Universal Primary Completion by 2015, most of them in Sub-Saharan Africa and South Asia. Even though overall progress has been made in primary education since 1990, critical obstacles persist: almost 100 million children under 15 years old suffer the worst forms of child labour, 13 million children are orphans, the number of child soldiers has increased and children from marginalised groups and ethnic minorities are increasingly excluded. In terms

Target 3

level, EU Member States and the European Commission enhance basic education through funding and policy dialogue around the national education sector programme. The third level of action is funding to NGOs for projects oriented towards basic education, an instrument chosen by several EU Member States. Apart from formal education, the EU supports non- formal education of young people in the framework of the YOUTH Programme.

This policy priority is translated into an increase in the overall financial resources dedicated to education in general and to primary education in particular. Several EU Member States consider basic education a first priority in their country programming and have decided to increase their overall ODA to basic education (the Netherlands, the UK, Sweden, France, Ireland and Denmark mention this in their reports). However, in absolute numbers and in proportion of overall ODA, the support to primary education varies widely between EU Member States. While some EU Member States aim at allocating 15% of their overall bilateral ODA to basic education, other EU Member States allocate less than 0,5%. For some EU donors the apparently lower contribution to basic education is due to the fact that they support a sector wide approach to education, while for others it is the result of a strong support for other areas of education, in particular vocational training and higher education. However, in addition to the targeted support to the education sector, more and more EU donors also aim to provide encouragement through policy dialogue and/or performance indicators that funds channelled to general budget support or to the HIPC initiative are dedicated to primary education.

United Kingdom Education Programmes

The UK provides support to education programmes in over 30 developing countries, mostly in sub- Saharan Africa and south Asia. The following are examples of that support.

Together with the World Bank, the UK supports basic education for children in poor western provinces in China. The project is focused on increasing access to and completion of affordable, quality, basic education for all girls and boys with a special focus on minorities and out of school children.

As Kenya recently abolished primary school fees, it has brought a dramatic rise in the number of children going to school. The UK assists the Kenyan Government to provide enough school places to keep up with demand and to ensure that quality is sustained.

with both low primary enrolment rates and a clear financing gap for MDG2 have less than five donors in the education sector, while in other partner countries there are sometimes over fifteen donors present supporting education, not counting the Non Governmental Organisations. It is expected that following the recent Council decision on Advancing Coordination, Harmonisation and Alignment, the EU Member States will enhance in-country complementarity, efficiency of aid and will decrease the transaction costs for their partner countries.

There is a growing consensus among EU donors to support policy reforms undertaken by partner countries in view of enhancing universal primary education. Several EU Member States have increased their support to partner countries which have embarked on difficult policy reforms in their education system, such as abolishing primary school fees, implementing new national sector programmes or decentralising resources and management of the education system. Another major challenge is to insert education policy in the overall national strategy for poverty reduction. A growing number of EU donors orient their financial aid towards the national education sector programme, enhancing leadership for the Ministry of Education and better co-ordination of donors. In this framework, contributions from various donors co-finance the countries' own education systems. The donors engage in the sector policy dialogue with the government and civil society, including annual joint sector reviews. EU donors are also giving direct technical support to Ministries of Education in sector analysis and diagnostics as well as institutional and human capacity building to promote long term sustainability. This is particularly important in fragile states, where in the short term many EU donors have opted for a project approach. At the local level, a priority is given to community participation in the school and to sound financial management

.

3.2.2. Focal areas

Respecting the principle of country ownership, the focus areas in the EU support to basic education are: (a) extending the supply of basic education, (b) increasing equity and (c) stimulating demand for primary education.

In the framework of partnership and joint efforts, progress has been made in extending the supply of basic education. EU donors have contributed to improving access (construction or rehabilitation of primary schools, pre-school facilities, non formal education, etc.) and quality of education (teacher training, school books, curricular development, education management, etc.). In recent years, EU donors have given increased attention to quality, in order to enhance primary completion. Moreover, quality is becoming an increasing challenge in countries with rapidly expanding enrolment, in fragile states and in poor rural areas. Finally, many EU donors are actively supporting adult learning, literacy as well as vocational training. Many of these project interventions have a particular focus on women in poor areas.

vulnerable children (orphans, children injured from exploitation, child soldiers, girls suffering sexual violence, disabled, marginalised ethnic minorities) tackling equity and responding to the special needs of these vulnerable children has become a necessity for reaching MDG2. The EU donors recognise this challenge for the achievement of universal primary education by 2015.

While most attention has been put on supply, less support has been given to stimulate the demand for primary or basic education. This area of education is closely linked to progress on the other MDGs, and some EU donors stress the cross fertilisations between poverty and education, health and education, drinking water and education as well as gender and education. Other EU Member States raise the importance of the relevance of education for employability and for the cultural and social context in which children live.

EU basic education India

In India, the government's SARVA SHIKSHA ABHIYAN (SSA) programme has as its objective to ensure that all children in the 6-14 year-old age group are in school and able to complete 8 years of elementary education. The pace of implementation of the programme is accelerated by grants from the EC and other donors.

Significant progress to achieving full access has been made in the majority of Indian States. In 2004, the number of out-of-school children was reduced from twelve to three million in two years time. Furthermore, pupil/teacher ratios are rapidly approaching the national norm of 40 students per teacher. Enrolment and completion rates of girls continue to improve. Special SSA programmes such as the National Programme for the Education of Girls at the Elementary Level and the provision of residential schools for girls have helped raise the rate of enrolment of girls to near parity. Where enrolment gaps continue to exist (e.g. remote areas, tribal minorities), these have been mapped and special `outreach' education schemes such as Education Guarantee Schemes and schools run by NGOs and local bodies have been launched. SSA support to Early Childhood Care and Education schemes and their subsequent upgrading into primary education in underserved areas, also prove a very effective bridge into education for children who are first generation learners.

Most EU Member States make reference to the importance of using the international framework on gender equality in national strategies for promoting equality. The framework consists of the relevant Human Rights Conventions, CEDAW, ICPD, the Beijing Declaration and Platform for Action, the Millennium Declaration and the MDGs. The majority of policy priorities are built around strengthening women's rights, access to resources, education and political and economic participation.

In order to strengthen the gender equality aspects of all the goals, the EU seeks to link the Beijing Platform for Action, the Beijing +10 Review of March 2005 and the MDG Review, through joint efforts and collaboration within the EU and with the UN system.

Most of the EU Member States identify gender equality as a crosscutting theme in development policy. Equally, in most Member States, support is being oriented both to mainstreaming gender equality in all activities of development cooperation and to funding programmes aimed especially at women and girls. Many EU Member States support girls' education programmes, such as UNICEF's Accelerated Girls' Education strategy aimed at ending gender disparities in 25 countries where the gap is the widest.

The necessity of gender disaggregated data for measuring gender-responsiveness is brought up in several Member State's reports. Further improvements in the field of monitoring were suggested in Austria's MDG report:

Austria - gender monitoring

At present, Austria is working to make its general commitment to gender equality more specific through gender mainstreaming in country and sector programmes, the enlarging of gender methodologies (e.g. gender specific target group analysis, gender-aware project cycle management, gender impact assessments, gender budget analysis) in order to create adequate data bases that can be used for monitoring and evaluation purposes. These methodologies will take into account the requirements for MDG reporting and will have a poverty reduction and empowerment focus.

3.3.2. Focal areas

Gender-equal education is acknowledged as a necessity to improve the advancement of women. Therefore most EU donors focus on the elimination of gender discrimination in education. Increasingly, there has been a shift towards the support of gender equality in primary and secondary education programmes.

A second focal area that appears from the MDG reports is the enhancement of a greater participation of women in economic activities and in the workforce. In this context, the possibilities of women to access assets such as land or property, without discrimination or exclusion, is crucial. Several EU Member States give specific attention to micro-finance mechanisms and promotion of women entrepreneurs.

Participation of women in economic activities

Luxemburg cofinances an UNDP project in Mali on education, training and socio-professional integration. The project supports women economically and socially through three linked axes: training, access to credits and revenue generating activities. The project offers possibilities for literacy and vocational training for women and girls; it makes them aware of and trains them in micro-credits and supports their efforts towards income generating activities.

Sweden supports several efforts to strengthen women's rights and access to resources. Special priority is given to women's access to credit and advisory programs within the framework of developing small enterprises.

Hungary has started - in the framework of the European Neighbourhood Policy, in cooperation with UNDP, a development cooperation project aimed specifically at women entrepreneurs in Serbia and Montenegro. This Women's Textiles Workshops Network addresses economic cooperation, SME development and cross border cooperation by women entrepreneurs.

A number of EU Member States identify national PRSPs as an important tool for the promotion of gender equality and cite the release of special funds for enhancing the gender dimension in PRSPs. Denmark for example, in partnership with relevant Ugandan ministries, women's NGOs and other bilateral and multilateral donors, has contributed to efforts to improve the integration of the gender dimensions into the revision of the Ugandan PRS.

Most EU Member States' contributions contain an element of strengthening civil society as part of a democratisation process. In some reports, the importance of women's organisations and networks is pointed out. For example, Belgium mentions that women's organisations in local communities are systematically taken into consideration at project level. Austria refers to supporting network building for female mayors in partner countries. Greece provides education, legal aid, and labour integration to victims of women trafficking. Through women's networks, Sweden supports exchange programs between various vocational groups and women Members of Parliament.

3.4. Goal 4: Reduce child mortality

Reduce by two- thirds, between 1990 and 2015, the under-five mortality rate Global under five mortality rate declined from 95 per thousand in 1990 to 80 per thousand in 2003. This progress translates into almost 2 million children lives saved every year. However, 51 countries are off track for meeting the 2015 target, 30 of which are in sub-Saharan Africa, where some 13.000 children die every day before reaching their fifth birthday. The main factors related to this issue are malnutrition, environmental hazards (unsafe water, hygiene and indoor smoke) and unsafe deliveries - including exposure to HIV transmission -

Target 5

and malaria. Access to modern water and energy facilities have a significant impact in reducing the risks that unsafe water and in-door smoke have on diarrhoeal diseases and acute respiratory infections in children.

3.4.1. Policy framework

The Convention on the Rights of the Child is the most widely ratified human rights treaty in history. One of its essential principles is the right to survival, where countries have all accepted a code of binding obligations to ensure children's access to basic services and to guarantee equity of opportunity for children to achieve their full development. With reference to the Millennium Declaration and the MDG4, the European Commission and the EU Member States strongly support the international agreement on protecting and promoting children's rights, called A World Fit for Children, adopted at the Special Session of the UN General Assembly on Children in May 2002. These time-bound goals include the 2015 MDG4 target, and a consistent set of intermediate targets and benchmarks during the course of this decade (2000 2010) such as a 90% Expanded Programme of Immunisation (EPI) coverage rate by 2005 and a 80% access to prevention of mother to child HIV/AIDS transmission.

Actions to combat child mortality relate to the protection of the most vulnerable - including children - and to the development of equitable and fair health financing mechanisms. The Council Resolution on Health and Poverty, adopted on 30 May 2002

27, refers to increasing the

volume and improving the delivery of aid. A substantial share of that increase should go to support for social development in developing countries with special emphasis on improving health outcomes through equitable and fair health financing mechanisms, closely linked to progress towards MDG4. Both the focus on MDGs and the priorities outlined in the Council Resolution are reflected in national laws on international cooperation and the multi-annual strategies for health ODA of the EU Member States. Besides the overall relation with poverty reduction, MDG4 is clearly interlinked with MDG1 (reducing malnutrition), MDG5 (improving maternal and neonatal care), MDG6 (HIV, malaria prevention and treatment) and MDG7 (water and sanitation). The close relation between MDG4 and MDG6, and hence the principles adopted by the International Conference on Population and Development (ICPD) and women's rights is crucial for the EC and EU Member States. In terms of child care, priority specific interventions at country and global levels are the Integrated Management of Childhood Illnesses and Immunisation (including polio eradication), endorsed and supported by the EC and EU Member States.

France prevention of child and maternal mortality

On child health, France priorities concern vaccination, the promotion of integrated management of childhood diseases, and the prevention of neo-natal mortality (linked to interventions on maternal mortality). France participates in financing GAVI, and contributes in particular, through WHO/UNICEF, to the eradication of poliomyelitis. France developed expertise in the field of the fight against maternal mortality and defined principles of global management of pregnancy and reduction of foetal-maternal risk. For instance, France has a project on prevention of maternal and child mortality and fight against HIV/AIDS in two regions of Burkina Faso, which focuses on pregnant women, mainly through training health agents and the rehabilitation of district maternity clinics.

3.4.2. Focal areas

The geographical focus of the funding from EU Member States and the European Commission is Sub-Saharan Africa, which is off-track for MDG4. Support to Africa accounts for over 50% of EU ODA for health. 31% of this aid targets the countries with lowest domestic resources for health.

Most of the EU support to MDG4 aims at equitable health services where child health is a priority. A large part of EU aid for health in developing countries is channelled through international organisations and global initiatives. The EU direct aid to countries aimed at improving health involves a variety of modalities. Most of the funds from EU Member States still earmark specific health areas and projects, often off-budget and with a focus on mother and child health programmes, communicable diseases and health policy and management. However, there is a gradual trend to channelling funds through participatory country-led processes around national programmes. The European Commission and several EU Member States are also providing significant funds for general budget support linked to improved health policies, strategies and outcomes.

In addition, the EU is a major contributor to the main UN agencies related to MDG4: WHO, UNICEF, UNFPA and UNAIDS. The EU is also a leading donor in the main global initiatives related to child health such as the Global Fund to Fight HIV/AIDS, tuberculosis and malaria, Global Alliance on Vaccines and Immunisation (GAVI)/The Vaccine Fund, the Global Polio Eradication Initiative and Roll-Back Malaria. These global initiatives aim at making progress on key prevention strategies such as coverage of immunization and long-lasting insecticide treated nets, and prompt and effective treatment of the most common causes of ill health and premature death through the Integrated Management of Childhood-related Illnesses (IMCI).

3.5. Goal 5: Improve maternal health

Each year 500.000 women die as a result of pregnancy, and millions more due to causes which are avoidable or easily treatable using existing inexpensive technologies. A significant proportion of infant mortality is associated with this poor maternal health, and there are strong links between actions on MDG5, and actions needed on MDG4, MDG6 and MDG7, to reduce infant and child mortality. Despite major achievements in increasing knowledge and demand for contraceptives, demand is often not met, due to problems of delivery or due to factors which limit women's right to control their own fertility. A massive gap remains in ensuring access to reproductive rights and supplies and services which are directly linked to women's health, maternal

Reduce by three- quarters, between 1990 and 2015, the maternal mortality ratio

Target 6

ill-health and child survival. The average MDG investment needs for health for the period between 2006-15 are estimated by the UN Millennium Project at $25 billion per year, a significant proportion of which will be needed to build effective systems for women's reproductive and sexual health.

3.5.1. Policy framework

European Union Member States signed up to and are committed to the achievement of the goals and objectives of the United Nations' International Conference on Population and Development (ICPD) held in Cairo in 1994. These goals are directly reflected in the wider EC policy framework

28 and in the policies and actions of many EU Member States. With a

focus on providing universal access to reproductive health care and services, the European Union attaches particular importance to the issue of maternal health

• 29. 

  The Cotonou

Agreement explicitly refers to the importance of integrating population issues into development strategies.

The EU has recently reaffirmed the need for a strong leadership in the prompt implementation of the ICPD Programme of Action in the context of the Millennium Declaration approved in September 2000. The European Union has in fact agreed that the Cairo agenda is key to poverty reduction and fundamental to achieving the MDGs. The EC and the EU Member States have also recognized the need for additional financial resources for sexual and reproductive health and rights to be provided through UNFPA and other international organizations. The EU has also stressed the need to link the fight against HIV/AIDS with support to the Cairo agenda to ensure strong political support and funding for sexual and reproductive health information, services and research as well as to ensure reproductive choices for people affected by HIV in accordance with the ICPD Plan of Action.

Denmark Safe motherhood in Ghana

In Ghana, the major part of Danish support to the improvement of health is granted as direct budget support to the general budget of the health ministry. General health has shown improvement in a number of areas over the last two years. For example, child mortality per 1000 newborns has fallen from 57% to 54%, and maternal mortality is being prioritised as one of the greatest challenges. Ghana's Ministry of Health has launched a programme covering, inter alia, training of local midwives. In addition to its budget support to the health sector, Danish development assistance has also focused on setting up sickness funds for the most impoverished people, to allow them access to reproductive health services in particular.

At a country level, the approach of many EU Member States and of the EC is to support health system strengthening and health care delivery approaches that are beneficial for improved access to basic services, including emergency obstetric services. Human resources development to improve the availability of trained and skilled health personnel is a recognised priority. In addition to strengthening government managed services, the Commission and EU Member States work closely with partners implementing the Cairo Programme for Action such as the UN Population Fund, International Planned Parenthood Federation and Marie Stopes International. The EC and EU Member States also provide grant support to NGOs for community based family health programmes and projects to combat practices harmful to the sexual and reproductive health of women (such as female genital mutilation). European support for maternal health includes significant and increased EC and Member State funding of research in the area of reproductive health.

3.5.2. Focal areas

The recognition of the stagnation or deterioration of many health indicators in sub-Saharan Africa, in part as a consequence of HIV/AIDS and continued high levels of poverty, has led many EU Member States to focus their support on Africa. However there is also recognition that given the large population living in poverty in other regions, particularly in Asia, the geographical focus of donors should not be too narrow. There are many millions fewer women in Asia than would be expected from demographic projections. These `missing millions' of women are a reflection of factors such as boy child preference and of neglect or even infanticide of girl children, and are an extreme example of the significant disadvantage faced by girls and women in all aspects of life. Gender inequality poses a particular challenge to meeting the maternal mortality MDG.

A number of specific, evidence based, priority areas for support were highlighted by EU Member States in their progress reports, including (a) the need to increase access to skilled birth attendants, (b) the need to increase access and speed of referral to emergency obstetric care services, (c) the development of innovative financing mechanisms, such as maternal health vouchers, which give women the wherewithal to access maternal health services, (d) addressing gender inequality in both societal attitudes and resulting community and service barriers, (e) improving the measurement and monitoring of maternal health, including strengthening measurement of process indicators (skilled birth attendance, maternal death audits), and (f) strengthening coordination between components of service provision, to ensure better integrated service delivery, with good peri-natal care being an important part of infant mortality reduction.

3.6. Goal 6: Combat HIV/AIDS, malaria and other diseases

Have halted by 2015 and begun to reverse the spread of HIV/AIDS Despite all the progress that has been made, the number of people affected by HIV/AIDS, malaria and other diseases continues to rise. In 2004, over 3 million people died of AIDS, and there were about 5 million new HIV infections. Sub-Saharan Africa remains the most affected by the pandemic, with particularly high prevalence rates among women, but the epidemic is growing rapidly in Asia and parts of Eastern Europe. Malaria kills more than one million people every year, most of them children also in sub-Saharan Africa, and its burden has risen due to growing resistance, the effect of displaced populations, climate change as well as the lack of improved water and sanitation systems especially in urban areas which mean that people are increasingly exposed to stagnant water where mosquitoes breed. Other diseases such as tuberculosis and acute respiratory infections continue to be a major burden of disease amongst adults and children,

Target 7

Have halted by 2015 and begun to reverse the incidence of malaria and other major diseases

Target 8

especially amongst the poorest and again are made worse by growing urbanisation and increased exposure to air pollution. Meanwhile, other communicable diseases are emerging and re-emerging and adding to the burden of diseases and premature death, especially on the most vulnerable in society. The global awareness and response to these epidemics has been the greatest ever mobilisation of resources. A High Level Task Force has been set up to determine the financing gap for HIV/AIDS, malaria and tuberculosis.

The internationally agreed targets for Tuberculosis control in 2005 were endorsed at the World Health Assembly on 5 May 2000. They aim at detection of 70% of all cases and successful treatment of 85% using the DOTS strategy by 2005, and a reduction in prevalence and mortality rates to half of the year 2000 estimate, by 2010.

One essential part of the international policy framework for global efforts to control these epidemics, is the Doha Declaration on TRIPS and public health and its follow-up in the August 2003 Decision on the implementation of paragraph 6 of this Declaration (cf. MDG8).

The recently adopted EU policy framework focuses on external action to confront HIV/AIDS, malaria and tuberculosis. This policy framework widens the action on these three communicable diseases in geographic terms. Furthermore the present policy framework is based on a wider rationale than poverty reduction and now includes human rights and human security as key concerns in the struggle to confront the three diseases.

During the term 2004-2006, the fight against HIV/AIDS, Tuberculosis and Malaria has a central role in the work programme of the Council. The Council has requested the Commission to present by April 2005 a comprehensive Plan of Action on different areas of intervention to confront the three poverty related diseases.

3.6.2. Focal areas

At the global level, the EU continues to prioritise the development of new, effective and affordable vaccines and therapeutic tools against HIV/AIDS, malaria and tuberculosis tailored to the needs of developing countries. This is carried out through a series of partnerships.

EU support to development of vaccines and therapeutic tools

The EC has set up a European and Developing Countries Clinical Trials Partnership (EDCTP) to accelerate the development of new clinical interventions to confront the three diseases and to improve the quality of research in relation to these diseases. EDCTP is also supported by several EU Member States. The EC is contributing 200 million to the EDCTP for the period 2003-2007 while EU Member States, industry and other donors are expected to finance another 400 million.

promoting price transparency in EC programmes and in programmes funded by the Global Fund; and through support to local production capacity.

In relation to HIV/AIDS, the EC recognises the geographical priority for Sub-Saharan Africa, given the enormous needs in this region. However, the EU is also concerned with the rapid spreading of HIV/AIDS in Eastern Europe and in neighbouring countries. The Conference "Europe and HIV/AIDS: New Challenges, New Opportunities" which took place in Vilnius on 16-18 September 2004, targeted at strengthening, networking and partnership on HIV/AIDS and related issues among the old and new EU Members States and their neighbouring countries.

The EU (EC and Member States) is the main contributor to the Global Fund to fight HIV/AIDS, tuberculosis and malaria with 2,8bn of pledges up to 2007 (55% of the total). The Global Fund supports country-led programmes according to needs and the quality of proposals. Two thirds of funds are granted to low income countries and 60% to sub-Saharan Africa. Given the multiplicity of bilateral (with the significant funding planned by PEPFAR, the US President's Emergency Plan For AIDS Relief) and multilateral initiatives (mainly the Global Fund and the World Bank) there is a need for stronger coordination and integration in country-led processes. The so-called `Three Ones initiative' is a response to this situation with a strategy to create in each affected country (a) One agreed HIV/AIDS Action Framework that provides the basis for coordinating the work of all partners, (b) One National AIDS Coordinating Authority, with a broad-based multisectoral mandate, and (c) One agreed country-level Monitoring and Evaluation System.

The EU is also a major partner to UN agencies (WHO/PAHO, UNICEF, UNAIDS, UNFPA, ILO) and global initiatives (such as RBM, StopTB, GAVI) related to the challenges around the main poverty diseases.

The dialogue of Member States with these organisations focuses

on their involvement in partnerships and coordination, their support for vulnerable populations, such as women and children, and the mainstreaming of the MDGs (especially Goals 3, 4, 5 and 6) into the strategic frameworks of each organisation.

The EC and several EU Member States co-operate with companies or private corporations in HIV/AIDS programmes aimed at enhanced prevention, treatment and care of employees and their relatives. Corporate Social Responsibility, as well as Private-Public Partnerships are gaining importance and EU Member States are increasingly building upon such partnerships.

causes for the spread of the pandemic are identified and addressed by a majority of EU Member States. In Sub-Saharan Africa more women than men are infected due to the imbalance of power between men and women and to the prevalence of sexualised violence, including women and girls being subjected to rape, especially in conflict and post-conflict situations. Women's health and the importance of sexual and reproductive health and rights are a key focus of action for several EU Member States. Many EU Member States support a comprehensive approach in the fight against HIV/AIDS, covering links between health, education, civil society, human rights and the private sector.

One of the specific initiatives supported by several EU Member States is ESTHER (Ensemble pour une solidarité thérapeutique hospitalière en réseau

) launched in 2001 with an approach

to create partnership between hospitals in Europe and Developing Countries in order to strengthen capacities to deliver HIV/AIDS treatment and care.

Further to the attention given to HIV/AIDS, malaria and tuberculosis, the EU is a key contributor to global initiatives targeting other major communicable diseases such as the Global Polio Eradication Initiative and the African programme of Onchocercosis control, amongst many others.

3.7. Goal 7: Ensure environmental sustainability

Target 9 Integrate the principles of By the end of 2003, 41 countries had made progress towards establishing a national strategy for sustainable development (NSSD), 27 countries had an approved NSSD, and out of these, 23 countries were in the process of implementing the strategy. In addition, 79 countries had components of a sustainable development policy in place.

sustainable development into

country policies and programmes and

reverse the loss of

environmental resources

Target 10 Halve, by 2015, the proportion of people without sustainable access to safe drinking water and access to basic sanitation Progress in sanitation is stalled in many developing regions. 2,6 billion people lack even a simple `improved' latrine. One person out of six has little choice but to use potentially harmful sources of drinking water.

Sustainable Development Strategy A stocktaking of Progress, is currently underway and includes the results of an extensive public consultation.

The 2001 Environmental Integration Strategy, which identifies opportunities and key entry points for the integration of the environmental dimension into EC Economic and Development Cooperation, is also due for review in 2005. Key elements of this Strategy include environmental training, the finalisation of the environment integration manual, and the use of Country Environmental Profiles and Strategic Environmental Assessment in the framework of the preparation and review of Country Support Strategies. By December 2004, approximately 50 such CEPs had been prepared or were under preparation.

Many EU Member States similarly consider that economic growth and poverty reduction cannot be sustained if they are achieved at the expense of the environment and through depleting natural resources, and have included an environmental dimension in their development policy. Some Members States are working with developing countries to ensure environmental issues are reflected in PRSPs and national poverty plans. The prevention of international environment threats is one of the main goals of the Finnish development policy. Belgium has established environment issues as one of the cross cutting themes to be integrated in the "mainstream" of its development cooperation policy. Similarly, environment is one of cross-cutting issues of Ireland's development programme and a new environment policy aims to strengthen Irish support to partner governments in integrating environmental sustainability into development planning, particularly through Poverty Reduction Strategies. Spanish development cooperation actively supports the integration of environmental issues into the strategic planning framework in partner countries. Denmark's strategy for development cooperation on environment sets out the goals and action for bilateral and multilateral efforts and the environmental dimension is mainstreamed. Sweden's policy for global development calls for taking environmental sustainability consistently into account in growth and development strategies, both at the national and international levels.

Efforts to effectively mainstream environment into development are also reflected in ODA- allocations. For instance, in 2003-2004 the UK committed £605 million to promote environmental sustainability in developing countries. Estonia committed approximately 15%

of its bilateral ODA to environment related projects in 2003, focusing on institutional reform in environmental protection and adjusting legislation in developing countries in order to help them meet international environmental commitments. France created the Fonds français pour l'environnement mondial (French Global Environmental Fund) in 1994, dedicated to environmental protection in developing countries and countries in transition. Since its establishment, France has pledged more than 200m into the Fund.

Facility, and the UN Forum on Forests. Together with the Community, the Member States provide almost half of the basic funding for the major Rio Conventions (Desertification, Climate and Biodiversity) and an even higher proportion of the financing made available through these Conventions to assist developing countries. The European Commission has adopted development-specific Action Plans with regard to both Climate Change

33 and

Biodiversity34 and plays an active role in shaping the future of the Desertification Convention.

EU Action Plan for Forest Law Enforcement, Governance and Trade

In an effort to stop illegal logging and trade in illegally harvested wood, the Commission published in May 2003 an EU Action Plan for Forest Law Enforcement, Governance and Trade (FLEGT)

• 35. 

  The

Action Plan sets out a package of measures which link governance reforms in producer countries with the legal framework of the internal EU market. The Action Plan involves a series of voluntary (but binding) partnership agreements with wood-producing countries and regions. Through these partnerships, the EU and partner countries will set up a licensing scheme to ensure that all timber exports to Europe are legal. The partnerships will also encourage governance reforms in wood- producing countries, particularly to promote greater equity and transparency in association with forest harvesting operations.

The MDG reports contain other examples of specific actions in relation to the MEAs. In the framework of the Kyoto Protocol, Belgium develops partnerships with developing countries so as to contribute to its CO

2 reduction or absorption targets, through the Clean Development

Mechanism, while transferring environment friendly technologies. Since 1999 Finland has been running a Clean Development Mechanism / Joint Initiative (CDM/JI) Pilot Programme in order to gain experience and promote project-based Kyoto mechanisms. In addition to emission reduction purchases the programme includes capacity building in the use of the mechanisms. Currently there are 5 JI projects and 7 CDM projects in the bilateral project pipeline. Finland has also invested in multilateral CDM and JI funds such as Prototype Carbon Fund and Baltic Sea Region Testing Ground Facility.

In Sweden's new policy for global development, special emphasis is placed on global environmental problems, in particular climate change, toxic chemicals and the loss of biological diversity. Sweden also pursues other issues, globally and locally, such as sustainable consumption and production patterns in order to minimize the negative influence that EU resource-demanding lifestyles have on nature. Sweden promotes the participation of all countries, including the poorest countries, in multilateral environmental cooperation.

promoted throughout all forestry cooperation. Finland has also been spearheading the international discussion on linkages between forestry and poverty reduction strategies.

3.7.2. Water & Sanitation

There have been a number of crucial landmarks over recent years (the Hague, Bonn and Kyoto Conferences and the Johannesburg WSSD) in the international debate on improving water management and access to water and sanitation, and there is a broad international agreement on what needs to be done. There is a consensus among Member States for i.a. the need to support developing countries to better integrate water and sanitation issues in Country Strategy Papers and Poverty Reduction Strategy papers.

Many EU Member states have demonstrated a strong involvement in the water sector, which sometimes forms a substantial part of their development aid. Germany is the second national donor (after Japan) in the water sector, with disbursements of around 350m per year, focused on Africa. France has spent 268m a year on average (2001-2003) on its bilateral aid in the field of water (with 166m for Africa). The UK provides 6% of its bilateral aid for water and sanitation services.

The G8 (including France, Germany, Italy, UK and the Commission) adopted an action plan on water in Evian aiming at meeting the MDGs and the WSSD goals in the framework of NEPAD.

Germany Water and Sanitation

German development cooperation in water and sanitation is addressed at 27 countries, with an emphasis on Africa. Support comprises improving water governance, capacity building and knowledge transfer as well as the development of infrastructure for sustainable water supply and sanitation. In addition there is a strong commitment to integrated management of water resources and to transboundary water issues. Following the G8 Water Action Plan, Germany has taken a lead role in capacity building in transboundary water issues, to develop and strengthen river basin organisations. Within the Africa Water Supply and Sanitation Group of the EU Water Initiative (see following box), Germany is coordinating the policy dialogue between Zambia and the EU in water and sanitation and supports the formulation of a roadmap towards reaching the MDGs.

are needed in the areas of water governance, capacity building, transfer of technology and finance if progress is to be made at the country level to achieving the water related MDG and WSSD targets. In particular, higher priority needs to be given to sanitation.

Water Initiative & Water Facility

At the World Summit on Sustainable Development (WSSD) in Johannesburg in 2002, the EU launched a Water Initiative to contribute to the achievement of the MDG and WSSD targets for drinking water and sanitation, within the context of an integrated approach to water resources management. The Initiative covers four geographical regions Africa, Mediterranean, Eastern Europe/Caucasus/Central Asia (EECCA) and Latin America. The key elements of the Initiative are to reinforce political commitment to action and raise the profile of water and sanitation issues in the context of poverty reduction efforts; to promote better water governance arrangements, to improve co- ordination and co-operation in the way that water-related interventions are developed and implemented; to encourage regional and sub-regional co-operation on water management issues, using the integrated water resources management approach, and to catalyse additional funding.

The 500m ACP-EU Water Facility adopted by the European Council in March 2004 is a response to this latter objective in the ACP region. The ACP-EU Water Facility has been developed as an instrument that can provide the missing link in financing sustainable activities and programmes in the water sector, to leverage other resources (private, development banks, financial institutions, users' contributions, remittances, etc) to finance water and sanitation.

As far as other regions are concerned, 38m have been earmarked from the TACIS Regional Programmes to support the development of the EECCA component of the EU Water Initiative. Also in the Mediterranean and Latin American regions, allocations have been made for future water-related activities.

3.7.3. Energy

Access to energy services facilitates economic development and creates income and employment, for example in agriculture, shops and small enterprises. Energy services can improve access to pumped water for drinking and irrigation of gardens and fields. Energy is necessary for education, and is needed to cook nearly all human food. Furthermore, improved energy efficiency and the use of cleaner and renewable sources of energy can help to achieve a more sustainable use of natural resources, such as woodlands and other types of biomass, and reduce emissions, thus protecting the local and the global environment. Access to improved stoves, which cut down on indoor smoke, has a major beneficial effect on the prevalence of chronic respiratory disease. Emission reductions could involve both the reduction of pollutant emissions affecting health (local effect) and the reduction of greenhouse gases (global effect). In this latter context, the Clean Development Mechanism under the Kyoto Protocol could bring substantial benefits to developing countries.

Other energy partnerships are based in Austria (Global Forum on Sustainable Energy GFSE), Denmark (Global Network of Energy in Sustainable Development - GNESD) and the United Kingdom (Global Village Energy Partnership).

In the Conclusions of the General Affairs Council (8566/04), April 2004, the EU Member States confirmed the need to provide adequate financing for the EU Energy Initiative. Furthermore the Council recognised that a strengthened involvement of the Commission and EU Member States is needed to respond to the developing countries' priorities as expressed at the November 2003 EUEI `Energy for Africa' conference in Nairobi, and requested the Commission to take the lead in the follow-up to this conference. In response, the Commission has proposed to set up an Energy Facility, conceptually similar to the already established Water Facility. Moreover, specific financial support has been made available in the context of the Intelligent Energy-Europe programme.

37

In addition, the European Commission hosts the secretariat of the Johannesburg Renewable Energy Coalition, which was launched at the WSSD and provides a unique platform for policy co-operation and discussions on renewable energy.

• 4. 

  IMPLEMENTATION OF MDGS 7 & 8 COMMITMENTS

On MDG8 (global partnership for development) and MDG7, target 9 (environmental sustainability within the EU) the EU performance can be measured relatively precisely. This section of the report looks into the implementation by the EU of its commitments in these areas. Analysis will be undertaken indicator by indicator.

4.1. Goal 7: Ensure environmental sustainability of the EU

Target 9 Integrate the principles of sustainable development into country policies and programmes and reverse the loss of environmental resources

considerable efforts, independently and with the support of EU funding, to upgrade their environmental infrastructure.

• - 

  In the area of climate change, the EU has played a leading role in developing a multilateral response and implementing the 1997 Kyoto Protocol, under which the EU has to reduce greenhouse gas emissions by 8% between 1990 and the commitment period 2008-2012. The implementation of the Protocol offers multiple opportunities to European industry for cooperation with third (developing) countries in the framework of the Clean Development Mechanism (CDM).

Within Europe, the European Climate Change Programme launched in 2000 has been the key vehicle in identifying measures to curb climate change. The Programme includes many initiatives, such as directives for energy performance in buildings, renewable energy and electricity, promotion of cogeneration of heat and power and taxation of energy products. The use of alternative fuels like bio-fuels or hydrogen is also being promoted actively. The Intelligent Energy for Europe Programme adopted in April 2002 will promote energy efficiency and renewable energy both in the EU and in third countries. A major landmark measure is the EU emissions trading scheme, which started operating on 1 January 2005, and which will help to reduce greenhouse gas emissions at lower cost to industry.

• - 

  The EU has set itself the ambitious objective of halting the decline in bio-diversity in Europe by 2010. Policy actions taken to achieve this EU target include the reform of the Common Agricultural Policy, the Common Fisheries Policy, the creation of the Natura 2000 network, further integration of biodiversity into sectoral policies and horizontal environmental instruments (such as the Strategic Environmental Assessment, Water Framework and Environmental Liability Directives) and efforts for the development of biodiversity indicators.

A review of the Community's Biodiversity Strategy (1998) and its four Biodiversity Action Plans (2001) has recently been undertaken feeding into the preparation of a prioritised roadmap to meet the 2010 target. The Birds and Habitat Directives are important instruments in that respect. As oceans and soil are crucial reservoirs of biodiversity, the EC is preparing comprehensive soil and marine strategies.

At the international level, successful involvement of the EU has led to important decisions both at the last Conference of the Parties to the Convention on Biological Diversity and the first Meeting of the Parties to the Cartagena Protocol on Biosafety. Decisions related to strategic plans and programmes of work for, inter alia, plant conservation, marine and coastal biodiversity, forest biodiversity, alien species, and protected areas.

sustainable consumption and production and the development of a Thematic Strategy on the sustainable use of natural resources, which will assess the extent to which policy choices are compatible with the overall objective of decoupling growth from environmental degradation. The elaboration of this Strategy will build upon a number of closely linked initiatives, such as the Integrated Product Policy

39, the Strategy on Waste Prevention and

Recycling and the Action Plan on Environmental Technologies. Regarding resource efficiency, actions include the Directive on waste electrical and electronic equipment and Directives to limit the use of fossil fuels, such as the Directives on energy performance of buildings, the promotion of biofuels (Directive 2003/30/EC) and cogeneration of heat and power. To give a comprehensive picture of EU action on sustainable consumption and production, the European Commission published a report in November 2004, covering both Community level policies and actions and examples from Member States

40 .

Finland - sustainable consumption and production

In Finland, as a response to the outcomes of the Johannesburg Summit (2002) on the promotion of eco-efficiency and sustainable consumption and production patterns, a broad-based multi-stakeholder Committee on Sustainable Consumption and Production was established. The mandate of the Committee is to develop a national, cross-cutting programme on sustainable consumption and production. The aim of the programme is to increase eco-efficiency of material and energy use throughout the whole lifecycle of products. In order to become a truly eco-efficient society, additional objectives and environmental policy measures will be defined and adopted for Finland.

• - 

  Environment concerns are increasingly taken into account in the policy making process. The overhaul of the Common Agricultural Policy, which decouples subsidies from production levels while introducing cross compliance to good agricultural practices and strengthening agri-environmental measures, will significantly improve the environmental standards of the countryside within the EU. The reform of Common Fisheries Policy is also a move towards a more sustainable approach to the management of natural resources.
• - 

  In the period from 2000-2006, the EU will spend large amounts of money from the Structural and Cohesion Funds to co-finance investments in the following sectors: 20 billion for environmental infrastructure (including water); 10 billion for the rehabilitation and maintenance of industrial, urban and natural sites (excluding the restoration of cultural heritage).

also put forward the proposal for a new chemicals policy under which industry will have to provide information on the effects of chemicals on human health and the environment (reversing the burden of proof) as well as on safe ways of handling them. Known as REACH (Registration, Evaluation and Authorisation of Chemicals), the new regulatory system will make a major contribution to improving health and environmental protection while at the same time maintaining the competitiveness of the chemicals industry and fostering innovation.

4.1.2. Indicators for monitoring progress

The common format of the EU MDG reports agreed by Council in June 2004 includes four environment indicators: (a) proportion of land covered by forest (MDG indicator 25), (b) ratio of EU area protected to maintain biological diversity (MDG indicator 26), (c) energy use in EU (MDG indicator 27) and (c) carbon dioxide emissions in EU (MDG indicator 28).

The following tables summarise the EU performance. However it should be noted that several of these indicators are difficult to measure (and hence produce unsatisfactory results) or the statistics are not calculated in consistent ways or at sufficiently frequent time intervals. Interpretation of these figures therefore requires some prudence.

· MDG indicator 25

Proportion of land area in the EU covered by forest41

In percentage 1990 2000

Austria 46,0 47,0

Belgium* 22,4 22,0

Cyprus 12,9 18,6

Czech Republic 34,0 34,1

Denmark 10,5 10,7

Estonia 45,8 48,7

Finland 71,8 72,0

France 26,8 27,9

Germany 30,7 30,7

Greece 25,6 27,9

Hungary 19,1 19,9

Ireland 7,1 9,6

MDG indicator 25 / forest / conclusion: The proportion of forest area provides an indication

of the relative importance of forest in a country and changes in forest area reflect the unregulated demand for land and forest products. During the period 1990-2000 the proportion of EU territory covered by forest increased. In relative terms, most progress was made in Cyprus, Portugal, Slovak Republic and Ireland. The countries with the largest proportion of forest remain Finland, Sweden, Slovenia, Estonia, Latvia and Austria.

MDG indicator 26

Area in the EU protected to maintain biological diversity as a % of surface area42

In percentage 1995 2000 2004

Austria 25 28 28

Belgium 3 3 3

Cyprus 4 4 4

Czech Republic 16 16 16

Denmark 6 7 7

Estonia 8 8 15

Finland 8 8 8

France 10 12 12

Germany 28 30 30

Greece 3 3 3

Hungary 6 8 9

Ireland 1 1

Italy 12 13 13

Latvia 6 14 14

Lithuania 11 11 11

Luxembourg 17 17 17

Malta 1 1

Netherlands 14 14 14

Poland 26 27 27

Portugal 4 5 5

Slovak Republic 24 25 25

Slovenia 7 7 7

Spain 8 8 8

Sweden 6 9 9

United Kingdom 18 18 18

EU-15 11 12 12

Terrestrial area in the EU protected under the Habitats directive, as a % of national surface area

In percentage 2005 2005

Austria 10,6 Latvia 11,0

Belgium 10,0 Lithuania 2,1

Cyprus 5,0 Luxembourg 14,8

Czech Republic 9,2 Malta 12,5

Denmark 7,4 Netherlands 9,5

Estonia 15,9 Poland 3,7

Finland 12,7 Portugal 17,4

France 6,8 Slovak Republic 11,8

Germany 7,0 Slovenia 31,4

Greece 16,4 Spain 22,6

Hungary 14,0 Sweden 13,6

Ireland 10,2 United Kingdom 6,5

Italy 13,9 EU-25 11,6

Source: European Commission

· MDG indicator 27

Energy use in the EU (kg oil equivalent) per $1000 GDP (2000 PPP) 43

1990 1995 2000 2002

Austria 144 138 129 134

Belgium 218 222 218 208

Cyprus 181 189 187 182*

Czech Republic .. 314 281 272

Denmark 140 147 124 124

Estonia .. 466 322 279

Finland 266 280 254 268

France 181 182 173 171

Germany 204 175 160 161

Greece 156 156 152 146

Hungary 247 251 196 187

Ireland 197 166 125 110

Italy 123 122 119 118

Latvia .. 290 200 205

Lithuania .. 358 235 249

Luxembourg 297 226 149 158

Spain and Portugal). The speed of this trend differs per country, with most spectacular progress seen in several of the new EU Member States and in Ireland. Energy consumption per unit of output is lowest in Ireland, Italy, Denmark, Malta and Austria.

· MDG indicator 28

Carbon dioxide emissions (CO2), equivalent in the EU (metric tons of CO2 per capita) 44

1990 1995 2000 2002

Austria 7,9 7,8 8,0 8,6

Belgium 11,9 12,3 12,2 12,2

Cyprus 6,8 7,0 8,2 8,3

Czech Republic 15,9 12,5 12,5 12,0

Denmark 10,2 11,7 9,9 10,1

Estonia 24,1 13,3 12,3 12,8

Finland 12,5 12,3 12,0 13,4

France 7,0 6,8 6,9 6,8

Germany 12,8 11,0 10,4 10,5

Greece 8,2 8,1 9,4 9,5

Hungary 8,1 5,8 5,8 5,6

Ireland 9,0 9,6 11,6 11,6

Italy 7,6 7,8 8,0 8,1

Latvia 8,2 4,2 2,9 3,1

Lithuania 10,5 4,0 3,4* 3,4

Luxembourg 33,8 23,6 20,5 22,8

Malta 6,2 7,8 7,5 7,5

Netherlands 10,7 11,2 10,7 11,0

Poland 12,5 9,0 8,1 8,2*

Portugal 4,4 5,3 6,2 6,5

Slovak Republic 11,3 8,2 7,5 8,0

Slovenia 8,3 7,5 7,7 8,3

Spain 5,7 6,3 7,5 7,8

Sweden 6,5 6,5 5,9 6,1

United Kingdom 10,3 9,5 9,2 9,1

EU-15 9,2 8,8 8,8 8,9

EU-10 12,2 8,6 8,3 7,9

EU-25 9,7 8,8 8,7 8,8

Source: UNFCCC (except for Cyprus and Malta: CDIAC), UNSD calculations

• * 

  2001

risk of not meeting the Kyoto targets. Most emissions from inland transport (lead, sulphur, CO, NOx, VOC) are declining, however, CO2 emissions remains a worrying exception.

The challenge of the coming years is to speed up the pace of reform and develop balanced policies that will stimulate growth and employment, while also protecting the environment and human health from increasing pressures, to the benefit of current and future generations.

4.2. Goal 8: Develop a global partnership for development

Target 12 Develop further an open, rule-based, predictable, non-discriminatory trading and financial system (includes a commitment to good governance, development, and poverty reduction both nationally and internationally)

Target 13 Address the special needs of the least developed countries (includes: tariff and quota free access for least developed countries' exports; enhanced programme of debt relief for HIPC and cancellation of official bilateral debt; and more generous ODA for countries committed to poverty reduction)

Target 14 Address the special needs of landlocked developing countries and small island developing States (through the Programme of Action for the Sustainable Development of Small Island Developing States and the outcome of the twenty-second special session of the General Assembly)

Target 15 Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term

Goal 8 targets are defined in an integrated fashion, reflecting the fact that the partnership with developing countries has both financial and trade dimensions. This section of the report looks at EU contributions in the area of financial assistance (ODA), trade and debt sustainability, which are all aimed at reaching the MDG8 targets.

Net ODA disbursements by the EU (1990-2003), current million

(including imputed multilateral flows46)

million

35,000

Total ODA

30,000Regional / Unspecified

25,000

Other developing countries

20,000

15,000Other low income countries

10,000

LDCs

5,000

19901995200020022003

Source: OECD

Total net ODA provided by the EU, in current million

1990 1995 2000 2002 2003

EU 22,313 24,023 27,497 31,875 33,036

Of which through EC 2,255 4,130 5,330 5,781 6,349

Source: OECD

ODA in current terms is the most commonly reported indicator. However, this measure does not take account of inflation and exchange rate movements. An alternative way of presenting the evolution of ODA disbursements over time is to use constant units, as shown in the graph below.

Net ODA disbursements by the EU (1990-2003), constant 2002 million

(including imputed multilateral flows)

million

35,000

Over the past few decades, EU ODA has gradually increased. Net ODA disbursements from the EU combined have reached 33bn in 2003, which represents a 15% rise in real terms since 2000

• 47. 

  In both real and nominal terms, ODA provided by the EU was at its highest ever

level in 2003.

However, looking at EU aid as a share of the combined EU Gross National Income (GNI) shows a different picture. Percentage-wise EU aid was at its highest levels at the beginning of the 1990's (see paragraph 4.2.1.2.). A decline in aid levels followed due to budgetary constraints and domestic priority setting by several large EU Member State donors, notably France, Germany and Italy. Since 1999, the downward trend of the 1990's has been reversed. The average EU ODA/GNI ratio reached 0,35% in 2003, up from 0,32% in 2000.

Denmark, Luxembourg, the Netherlands and Sweden are well above the UN target for ODA of 0,7% of national income

• 48. 

  Outside the EU, only Norway reaches this target. Denmark, the

Netherlands and Sweden already reached the UN target in the 1970's and have maintained their high level of support ever since. Denmark has the stated ambition to `remain among the lead donors'. Luxembourg has included the 1% target in its government programme. The Netherlands is committed to maintain its ODA target at 0,8%. Sweden is committed to reach the target of 1% in 2006.

Other EU countries are making progress towards the UN target. Belgium, Finland, France, Ireland, Spain and the United Kingdom have all publicly committed themselves to reach 0,7% and provided a timetable.

At the International Conference on Financing for Development (FfD) in Mexico in March 2002, the international community adopted the so-called Monterrey Consensus, offering a comprehensive agenda for action. Acting collectively, the Union contributed significantly to the overall positive outcome of the Conference. This contribution is summarised in a series of explicit commitments, adopted at the European Council in Barcelona on 14 March 2002.

The Barcelona Commitments

· Examine the means and timeframe for each EU Member State to reach the UN target of 0,7% ODA

of Gross National Income (GNI), with an intermediary target of 0,39% by 2006, by which time the Member States should reach the target of at least 0,33% of GNI individually;

· Pursue the efforts to restore debt sustainability in the context of the enhanced Heavily Indebted

Poor Countries (HIPC) initiative.

The European Union mandated the Commission to produce annual monitoring reports on the implementation of the Barcelona commitments. The 2004 report

49 showed that the Union

remains firmly engaged in the FfD process and is on track for meeting its 2006 interim targets for the increase in ODA, although some Member States appear to have difficulties in delivering on their commitments. In conclusion, the report indicates that progress has been made, both regarding ODA increase and against the other Barcelona commitments, but that increased efforts are imperative.

Looking at the EU projected percentage of GNI for 2006 the EU is expected to reach 0,42%.

Projected ODA as a % of GNI in 2006

%

0.8

0.7UN Target 0,7%

0.6

0.5

0.4

0.3Projected DAC weighted average in 2006 0,30%

0.2

0.1

EUUSAJapan

Source: OECD, European Commission

Czech Republic Emerging donor

The Czech Republic was one of the first new EU Member States to make the transition from a recipient to a donor country. In 1995, it already had an official government policy for development assistance and a foreign aid programme based on principles comparable with policies of advanced donor countries. Today, development cooperation is an essential element of the Czech external policy framework. The Ministry of Foreign Affairs coordinates the activities of ten other ministries and institutions including on project evaluation and implementation. Development assistance projects focus on sectors where the Czech Republic enjoys comparative advantages. The Czech Republic has substantially increased its ODA. Since 2000, its overall aid volume has quadrupled and its current ODA per GNI is the highest among the new Member States. The nongovernmental sector in the Czech Republic has an essential role to play. NGOs have implemented a wide spectrum of development projects, which represents an important share of the Czech bilateral development cooperation. In order to coordinate activities, NGOs established the common platform FORS (Czech Forum for Development Cooperation).

landlocked developing countries, (e) proportion of ODA spent in small island developing states. These correspond to MDG indicators 33 to 37

50.

· MDG indicator 33a

Total net ODA provided by the EU, as a percentage of gross national income51

In percentage 1990 1995 2000 2002 2003

Austria 0,11 0,27 0,23 0,26 0,20

Belgium 0,46 0,38 0,36 0,43 0,6052

Cyprus .. .. .. .. 0,02

Czech Republic .. .. 0,03 0,06 0,11

Denmark 0,94 0,96 1,06 0,96 0,84

Estonia .. .. 0,01 0,02 0,01

Finland 0,65 0,31 0,31 0,35 0,35

France 0,60 0,55 0,32 0,38 0,41

Germany 0,42 0,31 0,27 0,27 0,28

Greece .. 0,15* 0,20 0,21 0,21

Hungary .. .. .. .. 0,03

Ireland 0,16 0,29 0,29 0,40 0,39

Italy 0,31 0,15 0,13 0,20 0,17

Latvia .. .. .. 0,02 0,01

Lithuania .. .. .. 0,01 0,01

Luxembourg 0,21 0,33 0,69 0,77 0,81

Malta .. .. .. .. 0,07

Netherlands 0,92 0,81 0,84 0,81 0,80

Poland .. .. 0,02 0,01 0,01

Portugal 0,24 0,25 0,26 0,27 0,22

Slovak Republic .. .. 0,03 0,02 0,05

Slovenia .. .. .. .. 0,08

Spain 0,20 0,24 0,22 0,26 0,23

Sweden 0,91 0,77 0,80 0,84 0,79

United Kingdom 0,27 0,29 0,32 0,31 0,34

EU-15 0,44 0,37 0,32 0,35 0,35

EU New Member States .. .. 0,02 0,02 0,04

Total EU 0,44 0,37 0,32 0,34 0,34

Through EC 10% 17% 19% 18% 19%

Source: OECD (except for Cyprus, Malta and Slovenia: national estimates)

· MDG indicator 33b

Net ODA provided by the EU to LDCs53, as a percentage of gross national income54

(including imputed multilateral flows)

In percentage 1990 1995 2000 2002 2003

Austria 0,07 0,06 0,06 0,09 0,07

Belgium 0,19 0,10 0,10 0,15 0,35

Denmark 0,37 0,30 0,34 0,33 0,32

Finland 0,24 0,09 0,09 0,12 0,11

France 0,19 0,12 0,09 0,12 0,17

Germany 0,12 0,07 0,07 0,07 0,10

Greece .. 0,01* 0,02 0,03 0,03

Ireland 0,06 0,12 0,14 0,22 0,21

Italy 0,13 0,04 0,04 0,09 0,08

Luxembourg 0,08 0,14 0,27 0,31 0,27

Netherlands 0,30 0,23 0,21 0,29 0,26

Portugal 0,17 0,16 0,16 0,17 0,14

Spain 0,04 0,04 0,03 0,04 0,04

Sweden 0,35 0,22 0,24 0,27 0,27

United Kingdom 0,09 0,07 0,10 0,08 0,12

EU-15 0,15 0,09 0,09 0,11 0,13

Source: OECD

• * 

  1996

ODA to LDCs as a % of GNI in 2003

%

0.16

UN Target 0,15%

0.12

0.08DAC weighted average 0,08%

0.04

EUUSAJapan

mostly composed by MICs, but has committed itself to allocate 20% of future Spanish ODA to LDCs, thus enhancing cooperation with Sub-Saharan Africa. Greece aims at increasing the percentage of aid allocated to Sub-Saharan Africa by 20 to 25%.

Net disbursements of ODA to Sub-Saharan Africa by donor, 2000-2003 average

(including imputed multilateral flows)

CanadaOther

Norway2%3%

3%

Japan

8%

USA 20%

EU

64%

Source: OECD

The new Member States contribute only marginally to LDCs. They specialise and concentrate on a limited number of countries, due to limited volumes of aid and human resources, and using comparative advantages. The new Member States are however also committed to help LDCs, for instance through trilateral cooperation. Lithuania mentions in its report its possible future involvement in LDCs, in close consultation with Scandinavian countries.

· MDG indicator 34

Percentage of total bilateral, sector-allocable ODA to basic social services (basic education, primary health care, nutrition, safe water and sanitation)*

55

In percentage 1996-1997 1998-1999 2000-2001 2002-2003

Austria 5,0 22,6 19,5 7,1

Belgium 11,3 11,2 16,1 19,4

Denmark 9,6 4,0 8,7 14,3

Finland 6,5 9,9 12,4 13,4

France .. .. 8,6 10,3

MDG indicator 34 / basic social services / conclusion: A voluntary international target to

devote 20 per cent of aid to basic social services (BSS) was established by the World Summit on Social Development held in Copenhagen in 1995. These figures show a great variation between Member States on this indicator, ranging from less than 3% for Portugal and more than 30% for Ireland. On average the proportion is however growing, from 11,7% in 1996/97,

to 16,6% in 2002/03.

The figures for aid to basic social services are underestimated, as some aid within wider sector programmes or multi-sector programmes is not captured by the reporting system. Several Member States report that they consider the methodology applied by the DAC as being too restrictive. For example, Spain calculated that aid to basic social services was 20%

in 2003 using a broader definition, including for instance medical education.

· MDG indicator 35

Proportion of bilateral ODA that is untied56

In percentage 1990 1995 2000 2002 2003

Austria 32,1 25,0 59,2 69,0 51,4

Belgium .. .. 85,7 92,6 99,1

Denmark .. 61,3 80,5 82,1 71,5

Finland 31,5 75,8 89,5 82,5 85,8

France 63,6 58,4 68,0 91,5 93,1

Germany 61,8 60,33 93,2 86,6 94,6

Greece .. .. 23,5 13,9 93,8

Ireland .. .. .. 100,0 100,0

Italy 21,7 59,8 38,2 .. ..

Luxembourg .. .. 96,7 .. ..

Netherlands 55,5 78,9 95,3 88,6 82,0

Portugal .. 98,1 98,2 33,0 93,7

Spain .. 0,0 47,2 59,9 55,8

Sweden 87,5 93,9 85,4 78,5 93,6

United Kingdom .. 86,2 91,5 100,0 100,0

EU-15 43,5 64,1 79,5 86,8 91,0

Source: OECD

MDG indicator 35 / untied aid / conclusion: Untying aid so that procurement can occur through international competitive bidding reduces aid costs and ensures value for money. Since 1990 the percentage of untied EU ODA has more than doubled to reach 91% in 2003. The ODA of Ireland and the UK is 100% untied. Countries that are well below the EU average are Italy, Austria, Spain and Denmark.

· MDG indicator 36

Proportion of ODA provided by the EU to landlocked developing countries

In percentage 1990 1995 2000 2002 2003

Austria 39,3 14,2 15,2 15,5 20,5

Belgium 18,7 17,2 15,8 16,6 9,8

Cyprus .. .. .. .. ..

Czech Republic .. .. 5,0 10,4 13,3

Denmark 16,6 18,3 19,0 18,6 20,2

Estonia .. .. 11,5 7,2 4,6

Finland 15,4 16,9 14,6 18,6 15,6

France 12,3 8,7 13,1 12,5 12,0

Germany 13,8 14,5 16,2 18,0 19,8

Greece .. 7,2* 7,7 28,8 11,6

Hungary .. .. .. .. 2,5

Ireland 20,4 29,4 28,7 33,5 29,8

Italy 15,2 15,0 17,1 13,7 15,4

Luxembourg 16,4 21,1 21,5 26,0 22,5

Latvia .. .. .. 1,3 0,0

Lithuania .. .. .. 4,9 1,6

Malta .. .. .. .. ..

Netherlands 14,2 18,4 14,5 18,5 16,5

Poland .. .. 11,5 20,7 12,2

Portugal 0,2 2,5 6,2 9,7 10,5

Slovak Republic .. .. 0,0 2,1 9,7

Slovenia .. .. .. .. ..

Spain 8,4 7,3 6,4 10,0 11,0

Sweden 15,7 17,2 14,9 17,7 15,6

United Kingdom 15,3 19,1 18,6 15,7 18,2

EU-15 14,1 14,0 15,5 16,1 16,1

EU New Members .. .. 8,1 11,3 11,0

Total EU 14,1 14,0 15,5 16,1 16,1

EC 20,3 20,0 14,8 19,4 19,3

Source: OECD

• * 

  1996

MDG indicator 36 / landlocked countries / conclusion: The UN believes that landlocked countries face special developmental challenges and should therefore receive special consideration in aid allocations. Since 1990 the proportion of ODA provided by the EU to landlocked countries has slowly increased, reaching a level of 16,1% in 2003. Differences between Member States are substantial, reflecting varying country orientations.

· MDG indicator 37

Proportion of ODA provided by the EU to small island developing States57

In percentage 1990 1995 2000 2002 2003

Austria 4,2 3,3 3,7 2,1 2,6

Belgium 2,8 2,4 3,1 2,3 1,3

Cyprus .. .. .. .. ..

Czech Republic .. .. 0,0 0,1 0,2

Denmark 1,4 1,4 0,9 0,9 0,8

Estonia .. .. 0,0 0,0 0,0

Finland 1,3 1,0 2,0 1,9 1,4

France 2,7 2,2 2,4 2,3 1,3

Germany 2,6 1,1 1,6 1,7 1,4

Greece .. 1,4* 1,6 1,6 1,1

Hungary .. .. .. .. 0,0

Ireland 1,4 1,0 1,9 2,0 1,6

Italy 2,5 2,3 1,9 1,3 4,0

Latvia .. .. .. 0,0 0,0

Lithuania .. .. .. 0,0 0,0

Luxembourg 3,2 11,2 8,9 6,0 5,9

Malta .. .. .. .. ..

Netherlands 4,7 4,1 2,1 1,4 1,0

Poland .. .. 0,1 0,0 0,1

Portugal 31,3 28,3 38,3 34,4 33,2

Slovak Republic .. .. 0,0 0,7 0,6

Slovenia .. .. .. .. ..

Spain 4,2 6,0 3,9 4,3 3,1

Sweden 2,6 1,9 1,3 1,0 1,0

United Kingdom 3,9 2,5 2,6 2,7 1,2

EU-15 3,0 2,5 2,6 2,4 1,8

EU New Members .. .. 0,0 0,1 0,2

Total EU 3,0 2,5 2,6 2,4 1,8

EC 6,6 7,3 4,0 3,1 2,2

Source: OECD

*1996

MDG indicator 37 / small island States / conclusion: As with landlocked countries, small island developing states (SIDS) face developmental challenges that receive special recognition in UN bodies. Since 1990 the proportion of ODA provided by the EU to SIDS has however decreased, reaching an average level of 1,8% in 2003. On this criterion, the variation between Member States is particularly big, varying from 0% to in the case of Portugal more than 33%

In accordance with OECD definitions the 35% of EU aid channelled to multilateral institutions mentioned above includes Member States' contributions to the EC development programmes (which take almost 20% of their ODA). The Member States contribute to the regular Budget of the Commission, of which about 5% is reserved for development activities. Furthermore, the EU Member States make contributions to the European Development Fund (EDF) which in turn finances Community aid to the ACP countries.

Since 1999 more than 90% of EU aid has been in the form of grants, compared with 80% in 1990. In reaction to the growing debt burden of developing countries, several EU Member States decided to abolish loans and henceforth to provide only grants in their bilateral programmes. Currently ten of the EU15 countries provide all, or almost all, their aid in the form of grants.

4.2.2. Trade and development

Trade can contribute positively to the MDGs through its impact on economic growth, It has been estimated that a pro-poor outcome of the current Doha Development Agenda (DDA) could increase global income by up to $291bn, with $159bn of this accruing to developing countries

60 (over 70% of these gains would however come from developing countries' own

reforms).

A positive and balanced outcome of the current negotiations, notably with respect to sustainable development (economic, social and environmental), is a key potential contributor to achieving the MDGs. Trade Related Assistance and Special and Differential Treatments under the DDA are, however, necessary to achieve a positive outcome. This is particularly so for the poorest countries, which may not be ready to face the increased competition resulting from market liberalisation. While trade alone cannot solve development problems, openness to trade and support for supply capacity are important elements in any coherent development strategy. For example, the trade dimension should be fully incorporated in the Poverty Reduction Strategy Papers (PRSPs). Implementation of trade agreements should also be given a greater focus to optimise the contribution of trade policy to all pillars of sustainable development, including poverty reduction. In all negotiations Sustainability Impact Assessments (SIAs) are deployed to inform negotiations to anticipate possible negative consequences of agreements, that these may be mitigated and to identify positive impacts, that they may be enhanced.

Subsidies in the agricultural sector and market access are critical to the DDA negotiations, as highlighted by the UN's MDG reports. The proposal made by the EU to all WTO Members in May 2004, to eliminate export subsidies by an end date and provide equivalent treatment of other types of export support, opened the way to the modalities framework agreement of July 2004 within the WTO. Key elements of this agreement are the elimination of export subsidies and export credit of over 180 days' duration by an end date to be agreed; disciplines to be developed on export credits of below 180 days' duration, food aid and state trading enterprises; a substantial reduction of trade-distorting domestic support; and market access provisions ensuring substantial improvements whilst recognising the need for particular treatment of sensitive and special products.

While the EU does not use any form of export support on cotton, provides free market access and has decided to significantly reduce trade distorting domestic subsidies in the sector, the EU also strongly supported addressing the cotton issue "ambitiously, expeditiously, and specifically" in the WTO agriculture negotiations.

In the area of non-agricultural market access, the EU has proposed to apply a non-linear formula, achieving deeper cuts on higher tariffs, as well as sectoral initiatives on products of export interest to developing countries, such as clothing and footwear, to bring tariffs on these products as close as possible to zero.

In the service area, the EU has tabled an ambitious offer covering areas of interest to developing countries, including "Mode 4" (temporary presence abroad and professional activities of natural persons). The EU has consistently called on all WTO Members to make further progress in this potentially important area of growth for developing countries, by tabling improved offers and showing openness to developing countries' interests.

Through its significant potential to contribute to trade and development, the EU was among the staunchest proponents of launching negotiations on WTO rules on trade facilitation, as agreed in the July modalities framework agreement. The negotiations will also aim at enhancing technical assistance and support for capacity building in this area, a field in which the EU is a leading donor. Vast amounts of time and money are wasted because of outdated customs and border procedures and practices. The cost of such procedures can reach 4-5% of the overall cost of trade transactions, which is about the same as the current developed countries' average tariff on trade in industrial goods. Halving the costs would mean saving 325bn.

The EU has played a pro-active role in ensuring better access to medicines for people in developing countries.

Affordable medicines

The EU has been at the forefront of international efforts to ensure access to essential medicines for developing countries. These efforts were most apparent in the adoption of the Doha Declaration on TRIPs and public health in November 2001, which confirms the right of WTO members to use flexibilities in the TRIPs Agreement, including issuing compulsory licenses on pharmaceutical products for reasons of public health. It also allows LDCs to defer implementation of patent law with respect to pharmaceuticals until 1 January 2016. Further to this decision, the EU played an active role in proposing solutions to address difficulties faced by WTO members with insufficient manufacturing capacity in making effective use of compulsory licensing. The TRIPs Agreement originally authorised the granting of compulsory licenses only if they were "predominantly for the supply of the domestic market". In August 2003, after lengthy and at times difficult negotiations, the WTO General Council adopted the Decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPs Agreement and Public Health, allowing for the granting of compulsory licenses also in the case of exports to countries with insufficient manufacturing capacity.

The European Commission actively participates in the work to transpose this above Decision in an amendment to Article 31 of the TRIPs Agreement. In October 2004, the Commission adopted a proposal for a Regulation to implement this Decision to be directly applicable in the EU. The proposed Regulation is currently being discussed in Council and Parliament. The EC also attaches great importance to ensuring that the Doha Declaration is not undermined either in the formal amendment of the TRIPs Agreement, through bilateral trade agreements, or through national legislation. Furthermore, the EC strongly encourages the pharmaceutical industry to adopt a policy of tiered pricing in order to supply the developing world with medicines at the lowest possible price. For such a policy to be viable, there must be protection against trade diversion of tiered priced medicines to OECD markets.

In response to this need, Coucil Regulation 953/2003 (on 26 May 2003) was adopted, it prohibits the (re)-import into the EU of pharmaceutical products identified as "tiered priced products". The EC also supports technology transfer and local production of essential medicines in developing countries.

Following the setback at Cancun the EU made a series of proposals to improve the functioning and the transparency of the WTO, to ensure that all voices, including those of developing countries, be heard in a more consistent fashion. In the short term, the EU suggested focusing on a few organisational improvements that could be introduced more easily - improving the conduct and management of Ministerial Conferences, facilitating full participation and establishing an advisory group to prepare work on behalf of members. The EC and its Member States have welcomed the recent report by the Consultative Board to the WTO Director-General entitled "The Future of the WTO" ("the Sutherland Report") which constitutes an important element for discussions among Members on this issue. The report contains a number of concrete conclusions and recommendations directly aimed at improving the functioning and transparency of the WTO. While not agreeing with all of them, we believe that they are a useful basis for further discussions.

With a view to improving people's access to safe water, sanitation and clean energy, the EC has launched an initiative to amend the OECD disciplines on export credits with a view to allowing export credit agencies to grant more favourable treatment to projects related to water or renewable energies. This is expected to be the subject of further negotiations in 2005 in the OECD.

Finally, the EU has supported the reform of the International Financial System to combat abuses of financial globalization, strengthen the voice of developing countries in the decision- making of the Bretton-Woods institutions and enhance the coherence between the UN, International Financial Institutions and the WTO.

4.2.2.2. The bilateral level

Since the entry into force of the Lomé Convention in 1975, the EU applies a preferential trade regime to ACP countries, with tariff reductions that go far beyond GSP preferences and that today grant duty-free treatment for some 99% of ACP exports. In June 2000 the EU and the 78 ACP countries signed the Cotonou Agreement based on three pillars: political co- operation, development co-operation and economic and trade co-operation

• 61. 

  This includes

progressively removing barriers to trade and enhancing co-operation in all trade relevant areas. The new arrangements, called Economic Partnership Agreements (EPAs), are being negotiated since 2002 and will enter into force in 2008. EPAs are not classical free trade negotiations but focus on trade and regional integration as instruments for development. Sustainable development is at the core of the talks with the six ACP regions, both within the negotiations and as part of the wider EPA process, linking development co-operation more effectively to trade talks. EPAs will be based on, and seek to reinforce, regional integration structures within the ACP.

Economic Partnership Agreements

The EPA negotiations were launched in September 2002. Following one year of discussions at the all-ACP level, negotiations at the regional level were opened in October 2003 with the first of 6 ACP regions. Since September 2004 negotiations with all 6 ACP regions have been launched. The new trading arrangements are expected to enter into force by 1 January 2008 at the latest. Meanwhile, Article 36 of the Cotonou Agreement maintains the non-reciprocal trade preferences that were applied under the Fourth Lomé Convention.

4.2.2.3. The unilateral level

In addition to the multilateral level, the EU has, for many years, operated unilateral preferential market access schemes under the Generalised System of Preferences (GSP) to provide developing countries with an added advantage on its market. This system, which is currently in the process of being renewed, covers 178 independent countries and territories. It provides access at zero rates for half the products covered and tariff reductions for the rest. The GSP has also provided further preferential access to countries which respect Core Labour Standards and those which make special efforts to protect the environment or combat the drugs trade. The reasoning behind these special incentive clauses is that for development to be sustainable it needs to be socially equitable and respect the environment. At the same time illegal trading in general, and drugs trading in particular, hinders development. Apart from the obvious difficulties caused by criminalising production, the rents from such trade are captured by a very small portion of the population and thus are not conducive to pro-poor growth.

A new GSP scheme for the period up to 2015 is about to be agreed by EU Member States. The objective of the revision of the scheme is to ensure stable, predictable and straightforward access for developing countries to the EU market, while targeting the countries most in need of support. The new GSP scheme would also provide incentives to follow a sustainable path to development, in compliance with EC/WTO obligations.

63

Everything But Arms

In 2001 the EU established a specific scheme for Least Developed Countries, called Everything But Arms (EBA). This scheme ensures quota and tariff free access to the EU market for all products but arms from the 50 LDCs

64 (although transitional periods exist for rice, bananas and sugar65). EBA is

the most significant preference scheme for LDCs and is instituted for an unlimited time period. Across the board preferences, such as granted with EBA, enable a greater use of preferences by beneficiary countries, make an enhanced contribution to development in these countries.

4.2.2.4. Trade flows

The extent to which the EU market is open to developing country partners is best judged by actual trade flows. Imports from developing countries have experienced steady growth over the past decade, levelling off between 2000-2003 due to the global economic situation. 2004 saw an encouraging increase, which hopefully signals a revival of trade growth. In this context, the EU is clearly the world's number one destination for developing countries' exports. In 2004, the EU25 imports from developing countries amounted to 47% of total imports and 63% of agricultural imports (more than 54bn in value)

Developing countries*' market share in EU25 imports (2004)EU25 imports from developing countries (1996-2004),

in billion

%billion euros

70600

60500

50

400

40

300

30

200

20

100

10

TOTALEnergyAgricultureTextiles 1996 1997 1998 19992000 2001 2002 2003 2004

EnergyAgricultureTextiles Other

Share of QUAD imports** from LDCs (2003) Share of QUAD agricultural imports from LDCs (2003)

USA

30,2%USA

16,7%

Japan

4,5%

Japan

CanadaEU25

2,3%13,3%

68,6%

EU25Canada

4.2.2.5. Indicators for measuring progress

· MDG indicator 38

EU figures indicate that between 98% and 99% of imports from ACP countries were offered duty-free treatment in recent years. Imports from the small number of remaining LDCs outside the ACP framework enter the EU market under the GSP/Everything But Arms scheme. Over recent years, the share of imports from LDCs entering duty-free has increased. The two schemes taken together result in more than 97% of imports from LDCs enter the EU duty-free.

The following aggregated figures on duty free imports from developing countries into the EU were calculated by the World Trade Organisation (WTO), the International Trade Centre (ITC) and UNCTAD. They confirm that duty free access to the EU market has increased in recent years, particularly for developing countries in general (LDCs had high levels of access even before EBA).

Proportion of total EU imports from developing countries and LDCs, admitted free of duty

1996 2000 2002

Developing countries

• - 

  excluding arms
• - 

  excluding arms and oil 44,6 % 35,4 % 62,2 % 55,2 % 67,5 % 63,0 %

LDCs

• - 

  excluding arms
• - 

  excluding arms and oil 94,4 % 94,0 % 97,8 % 97,5 % 97,2 % 96,7 %

Source: WTO, ITC, UNCTAD

· MDG indicator 39

Textiles and clothing is an important sector for developing countries. The EU has favourable schemes in place for developing countries in this area: no tariffs and quotas are imposed on the LDCs and more advanced developing countries benefit from tariff reductions under the GSP scheme. At the multilateral level, the textile sector has been progressively liberalised and all remaining quotas were phased out on 1 January 2005.

The figures above provide one measurement of average tariffs for the EU, which confirms a general trend downwards. However, it is worth noting that it is difficult and can indeed be misleading to speak in general terms of indicators such as average tariffs on products, for they do not capture the diversity of the EU preferences granted to the different groups of developing countries.

· MDG indicator 40

The EU is aware that, as regards domestic support to the agricultural sector, subsidies that encourage production can have a distorting effect on world markets, since they can lead to increased production and exports. The EU has engaged in a substantial reform process of Common Agricultural Policy (CAP) (see paragraph 2.3), which has resulted in a drastic change of the nature of its support to the agricultural sector.

The changing nature of agricultural support in the EU has been evident on export refunds, one of the most visibly trade distorting instruments. The proportion of the EU's farm budget spent on export refunds is down from 30% in 1990 to less than 8% in 2002 (corresponding to 8-10bn in 1990-92 and around 3bn in 2002). Finally, despite the increased size of the agricultural sector due to the accession of ten new Member States, overall agricultural expenditure has been reduced, resulting in a corresponding reduction in the relative importance of agricultural support compared to GDP.

In the discharge resolution for the 2001 financial year, the European Parliament called for an evaluation of all export refund schemes and their impact on world hunger, as well as corresponding increase in food aid. The Commission took the commitment to carry out this study under the title "Impact of export subsidies on world hunger".

Total Support Estimate

This report uses the agreed OECD figure of "Total Support Estimate" (TSE, an estimate of gross public support to the whole agricultural sector) as an indicator of policy progress in this area. However, this indicator is not a measure of the potential impact of agricultural subsidies on international trade and developing countries markets. It includes not just subsidies to farmers but wider public expenditures for the agricultural sector, like research, vocational training, veterinary and phytosanitary measures, some rural infrastructure, etc. It also includes an estimate of the non-monetary transfers from domestic consumers to producers resulting from border protection. It would therefore be misleading to use these data as approximations of trade distortive subsidies granted to farmers.

to reduce the distorting effect of EU internal policy on world markets and thus reduce the potential negative impact on farmers in developing countries.

EU domestic agricultural support (TSE) as % of GDP

1990 1996 2000 2002 2003

2,2 % 1,7 % 1,3 % 1,2 % 1,3 %

Source: OECD

· MDG indicator 41

Market access is a necessary, but not sufficient condition to secure increased trade which is a powerful mechanism for growth and poverty reduction. The importance of trade related assistance and capacity building (TRA/CB) was clearly recognised by the Commission in its Communication on trade and development. TRA/CB is crucial to help developing countries capture trade gains. Increasing TRA/CB was amongst the commitments made in Monterrey in 2002.

The European Commission has significantly stepped up its trade-related assistance in recent years and will continue to pursue these efforts. In the period 1996-2000, the support for trade related projects amounted to around 640m

• 69. 

  Since Doha the EC has committed 3bn in the

period 2001-2004 for Trade Related Assistance, an average of 750m annually.

Distribution of EU Trade Related Assistance by region and main category, million

Trade policy and regulationsTrade development

million million

500 800

400 Global programmes

600Oceania

300 Europe

400

200 Asia

100 200America

Africa

As the table below shows, the percentage of EC aid going to TRA/CB is much higher than in any of the Member States. Although the EC figures appear to be decreasing, this is largely a function of the programming and commitment cycles.

Proportion of EU's sector allocable ODA provided to help build trade capacity

In percentage 2001 2002 2003

Austria .. .. 0,6

Belgium 2,4 1,9 9,6

Denmark 0,6 0,3 4,5

Finland 1,0 1,6 2,9

France 0,4 4,6 2,7

Germany 2,6 2,4 2,3

Greece 0,0 0,0 0,2

Ireland 0,3 0,2 0,2

Italy 1,4 1,2 ..

Luxembourg71 .. .. ..

Netherlands 2,2 1,3 4,7

Portugal 0,7 8,9 1,7

Spain 0,1 0,2 0,5

Sweden 0,9 0,4 1,6

United Kingdom 3,3 2,4 3,0

EU-15 1,7 2,2 2,8

EC 14,4 13,0 11,1

Source: WTO-OECD

Apart from using the channels mentioned above, the EC and a number of EU Member States provide assistance for country-specific or sector-specific projects. The EC has set up a new 50m facility (Trade.com) aimed at enhancing ACP capacity for trade policy formulation, to mainstream trade in their poverty reduction strategies, to implement the mainstreamed trade policies and to participate in international trade negotiations. France provides bilateral assistance (amounting to 30m for the period 2003-2005) to 12 developing countries in Africa and South East Asia aimed at strengthening trade negotiation capacity (including export capacity and promotion). The UK Government supports developing countries in focusing on policies which assist capacity building in trade and supply. Spain provides TRA to Latin American countries. New Member States such as Estonia are also providing TRA targeted at South East Europe, Central Asia and South Caucasus. In addition, a number of EU Member States are involved in promoting bilateral economic co-operation and support to improving the business environment in developing countries to address specific constraints. For example, the Netherlands provides assistance focusing on the financial sector, fighting corruption, training customs and tax officials and institutional capacity in the area of SPS measures.

The HIPC initiative involves both bilateral and multilateral public creditors as well as commercial creditors. In 1999 the Initiative was revised and strengthened and, in the same year, endorsed by the G7 summit in Cologne, Germany.

72 This initiative has multiple

dimensions emphasising debt relief but linking it to poverty reduction, structural adjustment and social policy reform, in particular in the health and education sectors. There are currently 38 countries that are potentially eligible for HIPC support, the majority of which are located in Sub-Saharan Africa. By the end of 2004, 27 countries had actually entered the initiative and reached `decision point' being thus eligible for the receipt of interim relief. Among these, 15 countries had reached `completion point', making them eligible for irrevocable relief. The last country having reached decision point was the Democratic Republic of Congo (DRC) in 2003.

The most recent total cost estimate of debt relief assistance under the HIPC initiative amounts to US$54,5bn for the countries

73 currently covered by the World Bank, changing only a little

from last year's estimates. The costs are almost equally divided between bilateral and multilateral creditors.

The EU has always been deeply committed to the HIPC initiative, contributing to its full implementation both bilaterally and through the multilateral institutions. Several Member States have committed in Barcelona to go beyond the HIPC requirements, cancelling up to 100% of bilateral ODA claims. Also the Commission is committed to the total cancellation of the "special loans" of the Least Developed Countries eligible for HIPC.

The EU collectively is the largest donor of the HIPC Trust Fund. A number of Member States contribute to the HIPC debt relief initiative, despite of the fact they have only few or no bilateral claims as they provide aid to low income countries in grant form, or for historical reasons. This explains the big variations in the figures of HIPC debt relief as a percentage of ODA. The new Member States contributed to HIPC as creditors and some contributed to the HIPC Trust Fund. The Commission participates to the initiative as a donor to the HIPC Trust Fund administered by IDA (the funds are earmarked mostly in favour of the African Development Bank) and as a multilateral creditor on the loans from EDF resources managed by the EIB.

The World Bank and the IMF staff are developing jointly a new forward looking framework for debt sustainability in low-income countries, with the aim of preventing new build-up of debt in these countries. The new framework is a welcome initiative and it is mentioned in the reports of several Member States. It includes a more complex definition of debt sustainability, with six indicators, and foresees a country specific analysis, including also the dimension of institutional quality, governance, domestic debt, and the stress testing of the long term assumptions (allowing to consider the effect of external shocks on the long term debt sustainability). The Commission has repeatedly underlined the importance of the transparency of the debt threshold fixing process.

The proposed solution of monitoring new lending activity, while being an essential activity to ensure long term debt sustainability, however does not seem to solve the problem in the case of countries that are already facing a situation of debt distress, that may be caused by external shocks. Poor countries are proven to be more vulnerable to external shocks than the average. Therefore efforts to protect these countries from the consequences of such shocks should continue.

The moving of the sunset clause of the HIPC initiative to the end of 2006 does provide the opportunity for some eligible post conflict countries to build the necessary track record to enter the initiative, but will not stop the international community from seeking alternative options for those countries that will probably remain excluded at the new expiry date.

Considering the above elements some countries, and in particular the UK have recently proposed a 100% multilateral debt cancellation for HIPC graduates and/or for all low income countries.

In November 2004 the Paris Club and the republic of Iraq agreed upon a comprehensive debt treatment of the public external debt owed to them providing a total amount of debt reduction of 80%, bringing the total debt stock from $38,9 billion to $7,8 billion in three phases (an immediate cancellation of 30%, a reduction of 30% delivered upon the approval of an IMF program, an additional tranche of 20% upon the final Board review after three-years of implementation of standard IMF programmes). Much of this will be eligible as ODA, but will be itemised separately in reporting. The amounts available for the poorest countries should not be affected by decisions concerning debt relief to middle income countries.

· MDG indicator 43

HIPC debt relief as a percentage of net ODA

In percentage 2001 2002 2003

Austria 38,3 14,7 3,7

Belgium 6,0 11,2 40,6

Denmark 1,3 1,7 0,4

Finland 1,5 1,1 1,2

France 3,0 19,1 28,4

Germany 1,0 3,7 18,3

Greece 1,1 0,0 0,6

Ireland 2,7 0,7 0,6

Italy 1,6 29,4 24,3

Luxembourg 0,0 0,0 0,0

Netherlands 1,3 7,6 6,2

Portugal 7,2 3,4 1,8

Spain 23,5 5,9 2,9

Sweden 1,8 0,0 6,9

United Kingdom 8,5 3,8 1,7

EU-15 4,9 9,1 14,2

EC 5,3 3,1 3,3

Source: OECD

The sharp increase in 2002 and 2003 is due to the countries achieving the HIPC completion point. The EU-15 average is given as a mere indication as some Member Sates do not have claims on HIPC countries.

• 5. 

  ISSUES EMERGING FROM MDG REPORTS ON PRIORITIES AND ACTIONS TOWARDS

2015

In November 2004, while emphasising the importance of ensuring a strong and well coordinated EU contribution to the review of the MDGs at the UN High Level Event of September 2005, the Council called on the Commission to prepare specific and ambitious proposals for action, in particular in the areas of finance for development, policy coherence for development and focus on Africa

74

5.1. Strengthening the EU role in the Global Partnership of MDG8

5.1.1. Financing for development

Both in the national MDG reports and in the context of the Monterrey follow up questionnaires, Member States refer to their performance and views regarding the Barcelona commitments. In summary the following picture emerges

75:

· Several EU Member States have expressed their commitment to further increase their aid.

A majority of Member States are either in favour or have no position on the idea of defining a new interim EU target for additional ODA increases by 2010.

· In their MDG reports EU Member States recognize the need to enhance aid effectiveness

through further coordination and harmonisation. In this context, there seems to be scope for improved information flow between Member States capitals and their field offices, to bolster the EU's joint co-ordination efforts.

· A majority of Member States seems to be in favour of broadening the scope of the untying

of aid.

· EU Member States have recently increased the proportion of their aid budgets allocated to

trade related assistance. Current efforts focus on making this support more effective, inter alia through the work of the EU Informal Trade and Development Experts Group, which could play a key role in progress towards a coordinated TRA approach at EU level.

· There seems to be a need for a new definition of International Public Goods that

broadens the scope of work to include regional and trans-national public goods.

· Several EU Member States are leading the international discussion on innovative sources

of financing. Current discussions focus on the International Finance Facility (as such not a new source of financing, but rather a pledge system to frontload planned aid-increases) as well as a range of proposals for international taxation and levies.

holistic approach, considering the development impact of all policies on global development and the position of developing countries and countries in transition (Estonia). Policy coherence is more effective because it utilises knowledge and experiences from different areas and the various contributions can strengthen one another (Sweden). It was also noted that policy coherence should be promoted in developing countries, through PRSPs (Finland).

Several reports speak about the need for closer cooperation with Ministries other than Development. It is argued that other Ministries should consider the impact of their policies on developing countries (Portugal, Estonia, Netherlands, Sweden, Finland). Conversely, other Ministries should also have the opportunity to participate in the formulation of development policy, through improved coordination mechanisms (Finland).

Relevant issues in the context of policy coherence that are identified in the MDG reports

include:

· Trade reforms (Denmark, Finland, France, Germany, Greece, Ireland, Netherlands,

Portugal, Spain, Sweden, United Kingdom), in the context of the DDA, looking in particular at a further reduction of trade barriers and an improvement of market access for exports from developing countries.

· Agriculture (Denmark, Greece, Ireland, Luxembourg, Netherlands, Portugal, Sweden,

Spain, UK)

· Fisheries (Netherlands, Spain, Sweden)

· Migration (Finland, France, Ireland, Portugal, Spain, Sweden, UK)

· Security (Finland, Germany, Ireland, Portugal)

· Industrial and intellectual property rights (Netherlands, Spain, UK)

· Environment (Denmark, Finland, Germany, Ireland, Portugal, UK)

Some Member States recall the political and financial commitments made at the G8

Kananaskis Summit that half of additional finance promised at Monterrey will be channelled

to sub-Saharan Africa. Some EU donors mention the need to provide assistance especially to African LDCs.

In terms of approach and sectoral priorities, the following elements are identified:

· Many Member States underline the importance of a regional approach and the promotion,

reinforcement and institutionalisation of the EU-African dialogue (France, Germany, Portugal).

· In this context, Member States mention the need to strengthen regional institutions

(Germany), in particular the African Union/NEPAD initiative (France, Netherlands, UK). The UN Economic Commission for Africa and the African Development Bank are also mentioned (UK), as well as sub-regional organisations (France). Some Member States argue for enhanced support to the African Peer Review Mechanism (Netherlands).

· Some Member States stress that conflict prevention should be addressed (Germany,

Ireland, UK), for instance through building African capacity for conflict prevention, management and post-conflict reconstruction (UK).

· Member States also mention the importance of progress on: more open trade markets and

improved trade conditions for African producers, transbondary cooperation; environmental protection; sexual and reproductive health and rights, women's rights, gender; good governance; debt issues; the fight against HIV/AIDS; and the development of infrastructure, in particular regional infrastructure; water resource management; and the promotion of culture.

· Some Member States mention they will try to reinforce support to Africa in the various

international fora (Portugal, UK), and promote debate about African development issues (Luxembourg, Portugal).

· Some Member States also encourage other donors to significantly increase aid volumes

· Leverage economic growth to boost pro-poor and social spending, especially in those

countries where past growth went hand-in-hand with increased income inequality (non- inclusive growth, characterized by rising GINI-coefficient).

· Strengthen the focus on poor people. The needs, rights, interest and conditions of poor

individuals, groups and poor countries should form the basis of the efforts to contribute to poverty reduction. Helping poor people to organize themselves and thus influence the political sphere and institutions so that they reflect their lives and their rights, shall be a priority for all development assistance.

· Promote decent work as part of the poverty reduction strategy.

· Support more efficiently the development of a business-enabling environment.

· Strengthen consensus amongst partner governments and donors that PRSPs constitute a

comprehensive development framework; a roadmap for aligning donor assistance with the country's priorities, and a consultation and coordination mechanism, involving also stakeholders and civil society.

· More effective food crisis prevention systems and mechanisms, as well as linking relief,

rehabilitation and development.

· Better integration of food security and food safety objectives into national development

strategies implying better monitoring of food insecurity and appropriate response strategies.

· More effective and sustainable use of food aid, based on sound needs assessment and

limited exclusively to situations where the cash option is not viable.

· Better management of the natural resources (soil, water, marine resources and forests) which are the foundation of food production and the livelihoods of the poor.

· Address the challenge of promoting development in fragile states, which constitute

primary schooling (e.g. school meals programmes, safe schools, school grants, law on compulsory primary education).

· Pool EU funded technical assistance for strengthening government institutional capacity

and to develop regional and local consulting expertise in education.

· Pool resources and promote decentralised co-operation to ensure increased funding in

education to countries in needs, without increasing transaction costs.

· Increased efforts in favour of gender equality in education strategies, labour market

policies and political participation. Girls' education should be promoted, both in primary and in secondary school, an increased participation of women in the economy and in the democratic political arena is essential.

5.2.3. MDG3 Promote gender equality and empower women

The EU should call for a clearer political commitment of donors and partner countries to gender equality. Indeed, efforts towards gender equality should be an integrated part of EU investments in all of the MDGs. This would require:

· Creating clear linkages between full and effective implementation of the Beijing Platform

for Action and achievement of the MDGs.

· Stronger emphasis on gender equality as a goal in itself, its central role in development

policy with focus on poverty reduction, human rights and the MDGs, in particular economic, social, sexual and reproductive health and rights, including good governance and democratic institutions.

· Combat, within an appropriate legal framework, violence against women, including

forced prostitution and the trafficking of women as well as domestic violence. In this context, it is also essential to provide free antiretroviral medication, post exposure prophylaxis and medical psycho-social support for victims of rape.

· Strengthen the focus on countries with highest Under 5 Mortality Rates, and that are off-

track for meeting MDG4. Currently only 28% of the global bilateral ODA for health is targeted at these countries. In this context special attention shall be given to countries in or emerging from conflict, who need special aid channels, linking relief, rehabilitation and development.

· Significant and targeted increase in investment in vaccination promotion, distribution and

delivery systems for EPI plus, and gradually integrate this package of interventions into a basic package of essential free and universal health services, with accelerated efforts and mass immunisation campaigns for geographical regions with low existing coverage.

· Provide access to antiretroviral drugs for HIV positive pregnant women, to reduce peri-

natal transmission of HIV/AIDS and womens' mortality caused by HIV/AIDS.

· In order to progress towards MDG4, developing and developed countries need to increase

their financing of health. The basic prevention and treatment services, which would prevent illness and premature mortality, require a minimum threshold of public spending on the functioning of health systems, of an estimated annual 30 per capita.

· The broader determinants of child health such as nutrition (MDG1), safe water,

sanitation and housing (especially avoidance of indoor smoke) (MDG7), need greater attention at national and international level.

5.2.5. MDG5 Improve maternal health

The linked challenge of overcoming significant gender inequality, which underpins many of the issues related to the poor access of women to sexual and reproductive health services and their difficulty in realising reproductive rights, makes this a particularly difficult MDG to achieve. The following actions should be considered to meet MDG5 by 2015.

· Support the proposal made in the framework of the Millennium Project to introduce a new

target to the maternal health goal, i.e. universal access to sexual and reproductive health and rights by 2015 through the primary health care system. Consequently, new monitoring indicators should be included such as: contraceptive prevalence rate; adolescents' fertility rate; availability of emergency obstetric care; HIV prevalence among women aged 15-24; proportion of demand for family planning satisfied.

5.2.6. MDG6 Combat HIV/AIDS, malaria and other diseases

Priority actions on financing, access and human resources as mentioned under MDG 4 and 5 are equally crucial for MDG6. The following should be treated as additional priority actions towards 2015:

· Link poverty reduction strategies with national health plans.

· On the basis of national market segmentation data, identify poor and vulnerable

communities for targeted distribution of free, long-lasting, insecticide-treated bed nets to all children and pregnant women in malaria-endemic zones, complementing existing social marketing strategies which will build local production capacity, with an aim of cutting decisively the burden of malaria, in the short term, at the same time as building longer term systems. In this context, promote research and production of cheap alternatives to DDT impregnated bed nets.

· Targeted distribution of free contraceptives, particularly condoms, focusing on high risk

and vulnerable groups for condoms, and poor and marginalised women for other contraceptives. Free distribution should be linked to massively increased investment in health promotion, and building capacity for social marketing based on building brand loyalty, to ensure longer term sustainable supply and to effectively tap into private sector distribution and marketing capacity

· While the ARV have seen major price reductions, there is a need to increase and sustain

the affordability of essential and effective combination therapies for HIV/AIDS, malaria and other diseases, including paediatric formulations and second-line treatments. There is also a need to increase the global level of investment in the development of effective and affordable vaccines and microbicides.

· Address the needs of the most affected and vulnerable groups, especially children,

young women and elderly persons. The case of orphans and vulnerable children affected by HIV/AIDS, often subject to rights' abuse, forced labour and dramatic forms of trafficking, deserves special attention and specific actions. National action plans should be elaborated in 2005 to meet the needs of orphans and children.

· Enhance Corporate Social and Environmental Responsibility both at EU level and

internationally.

· Pursue efforts to meet the 2010 EU and WSSD targets to stop / reduce the decline in

biodiversity (including through adequately considering the links between biodiversity protection and poverty eradication).

· Pursue efforts to ensure the sound management of chemicals throughout their life cycle in

the EU and at global level.

· Pursue efforts to address, prevent and adapt to climate change and implement the United

Nations Framework Convention and its Kyoto protocol, for example through mechanisms such as emissions trading, Joint Implementation and the Clean Development Mechanism.

· Co-operate and work further to develop a global framework to address climate change

post-2012, based on common but differentiated responsibilities and capabilities of countries.

5.2.7.2. Water and sanitation

The following actions towards 2015 would be considered necessary to make effective progress towards achieving the water and sanitation target under MDG7.

· Develop integrated water resources management and water efficiency plans, including the

establishment of legal and institutional frameworks, and produce sector investment programs focusing on the water and sanitation MDGs.

· Improve water and sanitation governance, including through stakeholder consultation;

establish appropriate mechanisms of coordination on water and sanitation issues at national level, identify roles and responsibilities of key actors for planning and implementation and facilitate decentralization of decision making on water and sanitation matters by building local government capacity.

· Assist in leveraging funds for the financing of projects and programmes aimed at

increasing access to modern energy services, especially in Sub-Saharan Africa.

· Increase coordination with related sectors (rural development, water, education, health) in

order to increase sustainability of actions aimed at reaching the MDG.

· Strengthen the links between EUEI activities to promote sustainable energy services and

major investments in the provision of sustainable energy infrastructures.

· Further develop the Johannesburg Renewable Energy Coalition under which the 88

countries that have so far joined the coalition have agreed to set targets and timeframes for increasing the share of renewable energies in their overall energy mix.

• 6. 

  CONCLUSION

In 2004 and 2005 the EU Member States and the Commission have released reports on their contribution towards attaining the MDGs. These reports provided the basis for this EU Synthesis Report on Millennium Development Goals 2000-2004.

This Synthesis Report looked at the quality of the EU support to developing countries in regard of MDG 1 to 7, as well as to the overall EU input into the Global Partnership for Development of MDG8. The EC Report and the national EU Member State' Reports are all consistent in their assessment of the situation:

(1) Virtually all reports indicate that a process of development policy review has taken place, is underway, or is being foreseen, in order to better align development policies with the challenges of the Millennium Development Goals.

(2) Most reports explain that contributions to the MDGs 1 to 7 are being provided, but that much more can be done, not only in terms of quantity, but definitely also in terms of quality of support. The EU Synthesis Reports provides an overview of the proposed actions on each

of the MDGs 1 to 7.

(3) At the same time many reports also explain that our development policies cannot exclusively look at the MDGs, but that other objectives shall also be considered, including those that contribute towards creating a conducive climate for attaining the MDGs.

further increase its contribution to the global partnership. In terms of geographical priorities, the EU has expressed deep concern over the lack of progress on the MDGs in Sub-Saharan Africa, and is committed to examining options for additional action to bring the development process forward

78.

Building on the information and analysis provided by the national EU MDG reports, the EC MDG report, as well as this EU Synthesis Report, the Commission has prepared three Communications, which provide concrete proposals on how to accelerate progress towards achieving the MDGs. Together these Communications offer a substantial reply to the challenges ahead.

ANNEX 1 LIST OF NATIONAL AND COMMUNITY MDG REPORTS

Austria

Austria's contribution to the EU-stocktaking exercise on MDGs, October 2004

Belgium

Belgium supports the Millennium-goals, First progress report by Belgium on MDG8 (`Global partnership for development'), November 2004

Czech Republic

Millennium Development Goals - Reducing poverty and social exclusion, and Statistical annex to the MDG report, February and October 2004

Denmark

Millennium Development Goals, Progress report by Denmark 2004, September 2004

Estonia

Estonia's report on Millennium Development Goal 8: Establishing global Partnership, November 2004

Finland

Finland's report on the Millennium Development Goals 2004, October 2004

France

Rapport sur la réalisation des Objectifs du Millénaire pour le développement, Contribution française, November 2004

Germany

Latvia

Millennium Development Goals, Progress report by Latvia, 2004, November 2004

Lithuania

Lithuania's report on the contribution to the Millennium Development Goals 2004, November 2004

Luxembourg

Rapport national du Grand-Duché du Luxembourg sur la mise en oeuvre des Objectifs du Millénaire des Nations unies, November 2004

Netherlands

Millennium Development Goal 8: Developing a global partnership for development, Progress report by the Netherlands, May 2004

Poland

Poland's report on the implementation of the Millennium Development Goal, October 2004

Portugal

Millennium Development Goals, Report from Portugal, November 2004

Slovak Republic

Millennium Development Goals, Slovak Republic (period 2000-2004/5), Goal 8 - Develop a global partnership for development, October 2004

Slovenia

Reporting to the 2005 Millennium Development Goals, Slovenia's international development cooperation, March 2005

ANNEX 2 THE MILLENNIUM DEVELOPMENT GOALS, TARGETS AND INDICATORS

Millennium Development Goals (MDGs)

Goals and Targets Indicators for monitoring progress

(from the Millennium Declaration)

GOAL 1: ERADICATE EXTREME POVERTY AND HUNGER Target 1: Halve, between 1990 and 2015, the proportion of people whose income is less than less than one dollar a day

• 1. 

  Proportion of population below $1 (PPP) per day 2. Poverty gap ratio [incidence x depth of poverty]
• 3. 

  Share of poorest quintile in national consumption

Target 2: Halve, between 1990 and 2015, the proportion of people who suffer from hunger 4. Prevalence of underweight children under-five years of age 5. Proportion of population below minimum level of dietary

energy consumption

GOAL 2: ACHIEVE UNIVERSAL PRIMARY EDUCATION Target 3: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling

• 6. 

  Net enrolment ratio in primary education 7. Proportion of pupils starting grade 1 who reach grade 5 8. Literacy rate of 15-24 year-olds

GOAL 3: PROMOTE GENDER EQUALITY AND EMPOWER WOMEN Target 4: Eliminate gender disparity in primary and secondary education, preferably by 2005, and in all levels of education no later than 2015

• 9. 

  Ratios of girls to boys in primary, secondary and tertiary

education

• 10. 

  Ratio of literate women to men, 15-24 years old 11. Share of women in wage employment in the non-agricultural

sector

• 12. 

  Proportion of seats held by women in national parliament

GOAL 4: REDUCE CHILD MORTALITY Target 5: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate

• 13. 

  Under-five mortality rate
• 14. 

  Infant mortality rate 15. Proportion of 1 year-old children immunised against measles

GOAL 5: IMPROVE MATERNAL HEALTH Target 6: Reduce by three-quarters, between 1990 and 2015, the maternal mortality ratio

• 16. 

  Maternal mortality ratio 17. Proportion of births attended by skilled health personnel

GOAL 6: COMBAT HIV/AIDS, MALARIA AND OTHER DISEASES Target 7: Have halted by 2015 and begun to reverse the spread of HIV/AIDS

• 18. 

  HIV prevalence among pregnant women aged 15-24 years 19. Condom use rate of the contraceptive prevalence rate

19a. Condom use at last high-risk sex 19b. Percentage of population aged 15-24 years with

Target 10: Halve, by 2015, the proportion of people without sustainable access to safe drinking water and basic sanitation30. Proportion of population with sustainable access to an

improved water source, urban and rural

• 31. 

  Proportion of population with access to improved sanitation, urban and rural

Target 11: By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers32. Proportion of households with access to secure tenure

GOAL 8: DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT Target 12: Develop further an open, rule-based, predictable, non-discriminatory trading and financial system (Includes a commitment to good governance, development and poverty reduction both nationally and internationally)

Target 13: Address the special needs of the least developed countries

(Includes: tariff and quota free access for the least developed countries' exports; enhanced programme of debt relief for heavily indebted poor countries (HIPC) and cancellation of official bilateral debt; and more generous ODA for countries committed to poverty reduction)

Target 14: Address the special needs of landlocked developing countries and small island developing States (through the Programme of Action for the Sustainable Development of Small Island Developing States and the outcome of the twenty-second special session of the General Assembly)

Target 15: Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term

Some of the indicators listed below are monitored separately for

the least developed countries (LDCs), Africa, landlocked developing countries and small island developing States.

Official development assistance (ODA)

• 33. 

  Net ODA, total and to the least developed countries, as

percentage of OECD/DAC donors' gross national income

• 34. 

  Proportion of total bilateral, sector-allocable ODA of

OECD/DAC donors to basic social services (basic education, primary health care, nutrition, safe water and sanitation)

• 35. 

  Proportion of bilateral official development assistance of

OECD/DAC donors that is untied

• 36. 

  ODA received in landlocked developing countries as a

proportion of their gross national incomes

• 37. 

  ODA received in small island developing States as a

proportion of their gross national incomes

Market access 38. Proportion of total developed country imports (by value and

excluding arms) from developing countries and least developed countries, admitted free of duty

• 39. 

  Average tariffs imposed by developed countries on

agricultural products and textiles and clothing from developing countries

• 40. 

  Agricultural support estimate for OECD countries as a

percentage of their gross domestic product

• 41. 

  Proportion of ODA provided to help build trade capacity

Debt sustainability 42. Total number of countries that have reached their HIPC

decision points and number that have reached their HIPC completion points (cumulative)