Manual International Development Policy: Energy and Development

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Todd Moss and Madeleine Gleave. November 1, Todd Moss. Related Experts. Stephan Kyburz. Sort by Post date Total views. Order Asc Desc. Todd Moss and Jacob Kincer. Holly Shulman. September 18, Roberto Laserna. Vijaya Ramachandran and Todd Moss. August 20, July 25, In this scenario the principle of ownership takes on a different framework, where recipient countries have the status of equal partners: decisions are taken on the basis of projects or specific investments, with less scrutiny on macro policy.

It is possible to identify three major features in the way emerging donors design and implement their development policies Smith, Yamashiro Fordelone et al. First, they like to state that they do not attach policy conditions to their development programmes. They repeatedly claim not to interfere in the domestic affairs of partner countries and that they respect the principles of 'national sovereignty' and 'solidarity'.

By presenting themselves in this way they differ from traditional donors, who tend to impose conditions in terms of macro-economic reforms and good governance. Secondly, emerging donors prefer to provide technical cooperation in the form of the direct implementation of the projects agreed with partner countries. Traditional donors, on the other hand, seek to influence the beneficiary's micromanagement of development affairs and interfere in the policy process.

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Finally, emerging donors tend to provide financial support concessional loans rather than grants and trade access Smith, Yamashiro Fordelone et al. In contrast, traditional donors continue to offer long negotiations to allow access to their markets. This brings to the fore the difficulties that exist in the relationship between the EU and its development partners, difficulties that are closely related to the widely criticised imposition of development models and policy conditionality based on such imperatives as a good governance agenda.

The Busan Forum on Aid Effectiveness was a negotiation arena where these differences between traditional donors and emerging donors were confronted. The EU presented a weak position, reflecting a lack of leadership, and conceded to many of the emerging donors' demands in order to join the partnership and sign the document. The final document reflects the concessions to emerging donors and, hence, the shift from an aid effectiveness agenda to an effective development cooperation agenda, marked by the voluntary nature of the emerging donors' commitments Glennie The declaration that came out from Busan OECD , embodies a change in the logic behind the aid effectiveness agenda on four points.

First, it moves from a focus on aid to one of cooperation and effective development. Second, it recognises the status of developing countries as de facto partners, as a way of acknowledging the mutual benefits of the partnership. Third, it decentralises the activities involving norm adaptation and monitoring to the field level and to other organisations that, in contrast to the OECD-DAC, are not 'donor-driven forums'. Finally, it establishes flexibility, enabling the involvement of emerging donors who do not agree with the norms developed in the context of the OECD-DAC. The Agenda for Chang e, launched in by the European Union, coinciding with the Busan Forum emphasises two main pillars for EU development policy: 1 the promotion of human rights, democracy, rule of law and good governance and 2 the promotion of inclusive and sustainable growth.

It proposes four major shifts: more conditionality concerning good governance and human rights; a focus on growth and the role of the private sector; a new concept of differentiated development partnerships with new aid allocation criteria; increased coordination of EU policies European Commission b. An essential part of the debate around this set of proposals is the issue of whether development objectives should be broadened to cover inclusive economic development, growth and employment creation or whether the focus should remain strictly on poverty reduction HTSPE On the first major shift, the European Parliament, as the guardian of the normative system and with a strong vetting power on the EU development policy following the Lisbon Treaty, has warned against the EU emulating the methods of such emerging donors like China, "since that would not necessarily be compatible with the EU's values, principles and long-term interests" European Parliament ; Smith and voiced its support for conditionality in EU cooperation with its partners with regard to human rights and environmental standards.

While the focus was initially on more than ten policy areas, in the proposed Agenda for Change European Commission b , PCD is related to global interests and only the security-development and migration-development links are emphasised. This modification reveals how the discourse seems to be following a reasoning of mutual benefit, in contrast to the previous approach that was much more paternalistic and anchored in the benefits that the developing countries had from EU cooperation.

However, despite these tendencies on the part of the EC, the language of mutual interest was not taken up in the final document of the Agenda for Change, which postulates that the ground might not be ripe for such fundamental changes of the EU development policy. The second major shift in this Agenda for Change is the clear interest of the EU in engaging the private sector to promote sustainable and inclusive growth. According to this proposal, the EU plans to use more ODA to mobilise private investment in developing countries European Commission By doing this, the EU seems to be following the steps of the new emerging donors that tend to use their development cooperation programmes to financially support the entry of their domestic businesses in new markets in Africa, Asia and Latin America.

As stated by AidWatch, CONCORD that monitors and make recommendations on EU aid effectiveness, when analysing the proposed Agenda for Change: " Few credible actions are envisaged to regulate private investment effectively in order to improve its social returns and overall development effectiveness, however, so the new focus on the private sector is likely to result in EU investors benefiting from EU aid, rather than poor countries benefiting from private investment.

The third major shift proposed by the Agenda for Change introduces an attempt to differentiate development partnerships that will lead to significant changes in particular in the relationships between the EU and upper-middle income UMICs and high-income countries HICs. They might, nevertheless, receive funding through other EU thematic programmes and other instruments. Interestingly, these countries happen to also be some of the leading emerging donors. The selection is to be based in four criteria: country's needs, country's capacity, country's commitments and performance, and potential EU impact.

This raises the question of how the EU can cut aid to influential emerging countries while working with them to address global challenges Gavas The last and fourth major shift focuses on increased coordination of EU development policy taking forward the idea of joint programming. The process is still in its early days so there is very little information on its actual impact so far. The contradictions between discourse and practice of the EU development policy. Unlike the approach undertaken by emerging donors that seems very clear and straightforward outlined above , there are three essential contradictions between the EU discourse and practice that continue to be unsolved with the Agenda for Change to create problems in the relationship with its partner countries and distort the political balance Carbone a : 1 moral responsibility versus economic interests; 2 social agenda versus economic growth; and 3 ownership versus conditionality.

One example is tied aid or aid disbursement on the condition that it be used to procure goods or services from a specific country. This is commonly view as leading not only to increasing costs in implementing a development project but also in administrative costs. By untying aid, donors are offering recipient countries to use their aid to procure goods and services from almost any country that offer better "value for money" and suit their needs. Another example of the contradiction between the EU discourse and practice is provided by the ongoing EPAs negotiations and a key trade instrument within the Cotonou Agreement.

The negotiations started in and were expected to conclude in African leaders have argued that the EPAs will destroy their nascent industries and hamper the needed structural transformation of the economy by allowing the entrance of European goods and services. There is need for a rethink of EPA negotiations taking into account current developments and the rise of emerging economies. The new issues geographical indications, investment, Trade and Environment, etc that are being introduced in the negotiations should not be negotiated to ensure the interests of African countries are not compromised.

The increasing agency of developing countries to the usual beneficiaries of EU development aid is already seen as a major reason behind the reducing asymmetrical power between the EU and the developing world Carbone a , and the role played by the new donors cannot be behind this agency is hard to challenge. The impact of this crisis in the EU development policy can be seen in several ways: it has reduced the material weight of the EU in traditional spheres of economic and political influence; it has created pressure from the constituencies of donor governments to focus on achieving better results 'value for money' , which sometimes entails more micromanagement from donors; and it has meant a search for new sources of income outside the EU by accessing new markets and resources within a growing global competition.

This new international and regional context has led to an increasing reflection on what should be the future of EU foreign policy European Think Tanks Group ; Fagersten et al. Given the colonial past of several of its member states, the EU has felt a moral obligation to push for poverty reduction as its main goal in terms of development policy and a focus on the achievement of the social-based Millennium Development Goals MDGs. In some respects, the EU acts as the conscience of governments which it regards to have failed to prioritise the concerns of the poor and are instead more concerned with growth and the satisfaction of the interests of local elites.

However, this does not necessarily improve the relationship between the EU and its partner countries with the latter frequently accusing traditional donors like the EU of micro-management and interference in their internal politics Glenn ; Faust The EPA issue also reflects this second contradiction as the EU is seen as pushing for the implementation of a neoliberal model of economic development and capitalism that are seen as responsible for the poverty in developing countries Craig and Porter ; Blunt, Turner et al. The EU appears to be trapped in its own ambivalence regarding the impact of its economic agenda in terms of social outcomes: on the one hand it asks for state deregulation and liberalisation, on the other hand it asks for a social focus on poverty issues.

In general, the link between trade and development is becoming a key factor in defining the future of European development policy. But as stated by Carbone and Orbie , while the EU is aware of the fact that there should be a nexus between trade and development, it does not have a "clear or distinctive view on how this should happen".

This is particularly evident for Africa. Europe is now seeing Africa as a potential market, as well as a source of natural resources. This is something new, as Africa did not weigh much in EU foreign investment. This business-oriented perspective will create challenges for the normative position, but Europe will be forced to retain and enhance its influence in the face of the emerging donors' models. While Africa is not traditionally a major trading partner for Europe, European countries remain among the major trade partners of the continent. After , the commercial ties between Africa and the EU increased rapidly, only to fall back in the aftermath of the economic and financial crisis that hit Europe.

For the past eight years, the value of non-EU trade in goods with Africa has risen substantially, with imports from Africa mainly energy products consistently higher than exports to it especially machinery and transport equipment.

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The growing aid ties between emerging donors, in particular China, and Africa are undoubtedly related to their needs in terms of the primary commodities required to feed their economic growth. However, the picture that seems to be emerging is that they are also tapping into the growing African consumer market and thus rivaling Europe and the USA. In contrast, the major European economies have struggled to compete with the new Asian competitors in the African market: Italy The other novelty of emerging donors in Africa lies in the fact that they were especially timely in intervening in another sector that had been neglected by the Europeans and Americans, despite the fact that it was a priority for African countries: the building of large scale infrastructure projects on the continent.

This has included the rehabilitation of roads and railways, the construction of new transport corridors and hydropower dams. These infrastructures are crucial to enable the continent to transform the economic structure and build an industrial sector to benefit from growing regional and global trade markets beyond commodities. Although emerging donors support poverty reduction policies, they are less doctrinaire on how to get there and steer clear of macroeconomic policy-making Walz and Ramachandran : They pursue a strategy of non-involvement, leaving the partner countries to decide on investment in social areas.

Economic interaction is driven by a notion of gains on both sides, based on what is termed win-win partnerships. In short, the imposition of economic conditionalities enhances the ambivalence between interests and norms that brings unease to the relationship between the EU and its recipient partner countries. This contrasts with the behaviour of emerging donors, who develop looser relations and are not so intrusive. Some EU member states, however, do not seem to be shying away from putting aid and economic interests together in their development policies.

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Richard Moncrieff states clearly when analysing the former French presidency led by Nicolas Sarkzoy that: "French aid has been one of the support mechanisms of French commercial presence on the continent, whether formally through aid tied to commercial contracts, or informally since the 'untying' of French aid". This represents the recognition that development objectives will now be linked to UK interests on the continent, including trade Cargill Bayne Bayne and Woolcock argues that governments try to reconcile three types of tension in economic diplomacy: between economics and politics; between international and domestic pressures; between governments and other forces.

In the specific context of development policy, we would include an additional tension between development aid norms and economic interests. Finally, the increasing call for greater ownership of development policies by recipient partners is closely linked to the good governance agenda which has been pursued by the EU since the early s. The concept, borrowed from the World Bank, emerged as one of the objectives of the EU development policy.

It was also at this point that the framework of aid effectiveness was established and reforms in the area of good governance came to be seen as a sine qua non condition for aid effectiveness and for the successful adoption of General Budget Support GBS as the preferred modality for disbursing aid among European donors and respecting the principle of ownership. This modality implies that the country has transparent systems and that it has governance and accountability structures in place and in operation - ideally, for its citizens in the first place, though also for the donors.

Yet, traditional donors, like the EU, have hesitated to provide it, in practice, due to the difficulties in ensuring good governance. This is particularly so when many developing countries are demonstrating solid economic growth, but continued and sometimes even rising levels of poverty Casse and Jensen This problem is connected with the lack of democratic accountability to their citizens and parliaments.

Traditional donors have insisted on democratisation and devised governance matrixes to try to ensure some level of accountability but they have resulted in further criticism of micromanagement and interference in the internal affairs of developing countries Carmody This is also linked to the lack of focus on pro-poor growth and the absence of redistributive policies in some developing countries, priorities that the EU has tried to stimulate.

The EU seems to be aiming at revising its development policy on this issue with the adoption, in August , of a new approach on "democratic governance" described to be "pragmatic" and based "on dialogue and capacity building" Carbone a. This new EC communication presents particular features: 1 democratic governance is only a means towards poverty eradication as the main goal of EU development policy; 2 good governance cannot be imposed from outside in respect of the principle of ownership; 3 an understanding of good governance that goes beyond being a merely technocratic issue focused mainly on the fight against poverty to embrace a more holistic view that includes also issues like access to health, education and justice, pluralism in the media, parliament activities, and the management of public budgets and natural resources; 4 harmonisation of EC and member states approaches to good governance; and 5 launching of a new incentive-based mechanism European Community Governance Incentive Tranche - ECGIT to reward countries for their governance achievements.

The reward would be offered following the production of a Governance Profile by the EC and an Action Plan by the recipient partner Carbone a; European Commission a. Yet, an independent study commissioned by the EC, in the end of , to review the "democratic governance" initiative external has revealed its shortcomings European Commission :.

Limited ownership of the GI process; 2 insufficient alignment between the GI and already existing governance processes and plans in a given country; 3 inflexibility of the tools; 4 political and institutional capacity constraints on both sides; 5 limited influence of the financial incentive alone; 6 insufficient harmonisation within the EU".

The study also proposed a series of recommendations: "1 support for democratic governance is to be embedded in local realities; 2 the role of regional or continental initiatives on governance; 3 engagement with civil society; 4 developing and enhancing existing local capacities; 5 rethink the incentives and conditionalities; 6 performance assessment; 7 flexibility and 8 strengthen harmonisation within the EU.

The promotion of good governance remains a pillar of the EU development policies but as shown above EU institutions seem to be unsure on how to implement it and to address it when dealing with countries which receive EU aid but are far from complying with what is understood to be EU standards for good governance.

Additionally, the Treaty of Lisbon offers the European Parliament - the EU guardian of the civil, political and social rights - a strong voice and vote on EU development policies. The emergence of new global economic powers that are increasingly becoming donors , the changing multilateral aid architecture under pressure to offer more space and voice to developing countries, and the challenge to market-oriented economic models dominant in Europe and the US following the crisis can be highlighted as the main features of the international aid arena.

These features have had an impact in the development discourse to one that "places more emphasis on mutual interest, global risks, global commons, and 'beyond aid' approaches" ODI With this new international aid landscape in place, the EU development policy is undergoing structural changes in its policy orientations and operationalisation as mentioned above. It is too early to assess the impact of the changes, but the EU seems to be now far from its instrumental role in shaping international development as it was in the early s, when it pushed for key global policy issues on financing for development, aid effectiveness and coordination, and policy coherence for development.

The new institutional framework set by the Treaty of Lisbon seems to have generated mixed feelings. The way this new institutional framework will be operationalised is crucial if the EU wants to manage strategic relationships in an increasingly crowded development aid landscape with a myriad of public and private actors to tackle global development challenges ODI As Humphrey Humphrey a stresses, there are two strategies that are particularly important to strengthen global governance and sufficiently meet these new challenges: 1 increasing the density of networks in order to create opportunities for interchange and the development of ideas, and increasing the capacity of global institutions such as the G20 and 2 ceding space to emerging powers in international organisations such as the UN Security Council, the World Bank and the International Monetary Fund.

This, Humphrey argues, would not necessarily imply a loss of influence but would increase the effectiveness of the organisations. Two examples reveal, however, how difficult these strategic partnerships might be to achieve for the EU within this new context. Carbone shows how the existence of three competing visions and goals within the EU European Commission, European Parliament and member states clashed to negatively affect the opportunity to constructively engage with China, the newest leading and rising global donor. Helly , assessing the EU-Africa partnership, argues that a growing "continental drift" is in the making due to the limitations and inefficacies now under review of the Joint Africa Europe Strategy.

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The EU likes to be perceived as a normative power, but the need to accommodate the different views and goals of a bloc, far from being monolithic, ultimately undermines its leadership in attempting to shape international development policies. Since the end of the s, the ongoing structural changes in the EU institutional framework and the emergence of a new international aid scenario reveals a volatile EU development policy that is failing to match discourse with practice.

In consequence, the EU seems to be now losing credibility and capability to engage with partner countries that are increasingly turning to new emerging donors. African Development Bank a. African Development Bank b. African Union Aggestam, L. Alden, C. London: Hurst and Company. Bayne, N. Woolcock The new economic diplomacy: decision-making and negotiation in international economic relations. London: Ashgate Pub Co. Blunt, P. Turner, et al. Hackenesh Cargill, T. Carbone, Maurizio Carbone, Maurizio a.

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