Commissioner Nielson's Speech at the Seminar for Members of the Development Committee and Senior World Bank Management

Five years ago, in 1999, I took office as European Commissioner for Development Cooperation and Humanitarian Aid. I'm very grateful for the opportunity to be here with you today, five years on, to reflect on the main trends in North-South relations and in particular comment on how the EU has responded to those - or should respond in the future, as this is a job that is never finished.

The first trend that I am proud of is that we have managed to reverse the trend of falling ODA. Coming from the big discussions during the 1990s concerning whether this was possible or not, we managed to turn the corner in Monterrey. No-one can contest that Europe, by acting forcefully and in a joint manner, had a considerable impact and triggered the US to move as well. The Union is even set to exceed the pledge we made in Monterrey (0.39 % of collective GNI) and reach 0.42% ODA/GNI by 2006. Several Member States have also identified a year by which they undertake to reach 0.7% of ODA/GNI. I congratulate all EU development ministers for this achievement and the leadership they have shown in relation to their national constituencies and fellow Ministers of Finance for securing these resources and successfully explaining why it is important to use them for development purposes.

And let me point out that the 2004 enlargement of the EU does not jeopardise our Monterrey commitment: without the New Member States, the ODA/GNI figure would have been 0.43 instead of 0.42, but still above 0.39. It is very encouraging to see the New Member States now take a very active interest in development issues and emerge as donors - or rather re-emerge, as many of them have historical ties with the developing world. The fact NMS are willing to play ball in this respect is a sign that you are serious about participating fully in the process of defining the European presence in the world. That is very positive. I hope that the citizens of these countries are taking pride in the fact that they are directly contributing to the European responses to crisis and suffering around the world, such as via the humanitarian aid we are currently giving to Haiti to alleviate some of the suffering there. They are entitled to know more, though, about what they are now part of, and the challenge of development education and public information is a very real one in these countries.

However, although the ODA trends we are seeing are very good, it is still not enough. I believe that the EU should bring a new financial ODA offer to the table in New York next year. We also need to look at the qualitative issue of how do we deliver the new resources a way that gives the right incentives and the right accountability? We want stable, predictable and long term flows. We do not yet have all the right instruments. This is why innovation is needed.

Second, I'm very glad that today, more than ever before, poverty reduction is firmly on the global agenda, and on the Commission's agenda. This is a real qualitative and conceptual shift compared to what we did in the early 90s. I believe the 1995 Social Summit in Copenhagen was a watershed event in this respect: it was an eye opener for the Bretton Woods institutions in particular concerning the importance of a holistic and people-centered approach to development.

The 1994 Conference on Population in Cairo furthered cemented the focus on the real situation of real people, including the issue of reproductive health.

By framing this commitment in the Millennium Development Goals, the HIPC initiative and the Poverty Reduction Strategy Papers, we have a framework for partnership centered on poverty both at global level and between the donors and each partner country.

Allow me a comment on the MDGs. I must admit that at first, I was skeptic as I feared that it would be counter-productive to expose the real needs and the quantifying the enormous amount of resources that would be required to meet them. I thought it was too risky; being out of reach and that it would have a demotivating and paralysing effect. But I was wrong: I think we can see now that the framework of bookkeeping that the MDGs have brought has had the complete opposite result; namely that of showing that it is possible to improve the situation of humanity with very reasonable resources. So instead of scaring support away from the development challenge, it has attracted people to it, and as I mentioned earlier, the MDGs are now backed by a positive ODA trend.

It is against this background that the Commission has been able to emerge over the last few years as a better, more reliable and mainstream partner. For the first time, we have a Policy Statement for European aid centered on poverty, and it has produced results: Over 43 % of our resources were allocated to low income and least developed countries in 2003, up from 34 % in 1999. We responded to the PRSP challenge by systematically introducing medium term strategies for the management of Community support. This is now a good basis for improving the complementarity in particular with EU Member States. The Commission has also embraced budget and sector support and promoted a shift towards results-based approaches. Last but not least, we have shown our commitment to HIPC by pledging more than 1.6B€ (or 1.9 Bn USD).

The change both within the Commission and in the global development partnership has also enabled us to reposition our relationships with the UN and the World Bank and the IMF, and the Commission has become a reliable partner in a wider process rather than a lone rider operating on its own.

But there is no reason for being complacent. I particularly like that PRSPs are actually first and foremost a tool for countries to manage donors - not the other way around - as it puts us in a position where we can finally be serious about ownership. But we need to continue to ask tough questions to really make ownership happen: How can we help to ensure results by giving the right incentives? How do we provide accountability without too much conditionality? In this context, allow me to also add that we also need to address the political domestic challenge to explain to our taxpayers that contributing money does not give the right to dictate policies.

In this area of work, collaboration with the World Bank in particular has been crucial and I would like to thank the Bank for this fruitful partnership. We continue - of course - to see things different from time to time, but I believe both sides have truly recognized that because of our sheer size and global reach, the quality of our cooperation makes a great deal of difference to the global development partnership.

I however usually say to Jim Wolfensohn, who will join us later that he might be a grand donor, but I am a grant donor!

Also the Bank has undergone a tremendous change process and is now a much more poverty-focused and credible partner for developing countries and development partner than it was ten years ago, which has made it easier to have a meeting of minds.

While we must have the self confidence to work with a medium to long term perspective, and use the lion's share of our assistance to support the national frameworks for poverty reduction policies, we must also, as donors, be able to respond to punctual priorities and thematic challenges.

The Global Fund for Aids, Malaria and Tuberculosis is a good example. Let me also make some publicity for the 500 M€ Water Facility, which will be operational this year to improve access to safe drinking water and basic sanitation for people in ACP countries; and announce that the Commission is about to adopt a similar proposal for an Energy Facility. The intention is that that these facilities will foster innovative partnerships, and bring about multi-stakeholder solutions.

Next year, the commitment to poverty will be put to the test when the progress towards the MDGs is assessed at the UN, and donors will be asked what they can do more to achieve the goals. There is no time for complacency now - and probably never. At current trends Africa is lagging behind the rest of the world. This is where the challenge is the biggest and where our collaboration is most important. We will all be judged by whether we help Africa to succeed.

But I also want to warn against painting the picture we see in Africa totally in negative terms. That would be counterproductive, and it would not do justice to the very important developments we have seen there the last years. I particularly think of the establishment of NEPAD, which might have come about as a result of what some refer to as a publicity stunt staged by the G8. But it has lead to important developments in a short space of time, notably the creation of the African Union and its Peace and Security Council, operating on the basis for QMV (imagine that in Europe in that policy area!), which led us to create a Peace Facility to support their work last year. And they are working - we see it in Sudan, and we expect to soon get the second request for financing of further operations. This is dialogue on African solutions to African problems. That is light at the end of the tunnel.

Now a few words on the coordination agenda.

It has been repeated so many times by now that it has turned into a mantra, but we need to coordinate better, do less of flag-waving and rationalise the way aid business is done. Visibility is good, but feasibility is better! It is true that development is and will remain a policy for which the EU Member States retain full freedom to pursue their own bilateral policies. It is also true that coordination must ultimately involve all development partners. But the EU could and should operate as a collective within the overall framework. We have been talking about coordination of aid policies and procedures at EU level since 1974 and it has been 30 years of good intentions, but unfortunately not 30 years of action. We owe it to our partner countries to simplify development aid management and we owe it to our tax payers to make the best use of the funds that are available to us.

That coordination must also take place in New York, at the OECD in Paris - and in Washington. I am very glad to see that the coordination between the European EDs is becoming closer and closer, but is it not the time for a genuine European Voice within the International Financial Institutions? To have on 25 Member States spread across x constituencies, shared with x non-member states, does not make for a coherent European presence.

A strong and coordinated European development policy is undoubtedly required if we are to achieve better coherence at European level and make our policies on trade, fisheries, migration, and peace and security also serve the poor. And here Europe has a special role to play vis-à-vis the South.

It is true that we have done a lot already to put trade at the service of poverty reduction: in particular, we have granted all Least Developed Countries free access to European Markets under the "Everything but Arms" initiative in 2001 and opening negotiations with all ACP regions for dynamic Economic Partnership Agreements, that I am convinced will give a very necessary impetus to building regional markets and boost economic growth.

But we need to do more. We need to have more self confidence as development professionals to inject ourselves into these discussions and influence the process more profoundly. Development cannot be effective if it operates in a vacuum.

This is as crucial in relation to the challenges posed by the peace and security agenda. None is contesting the nexus between peace, stability and development. We need to work for that, and we are. But the development community must be vigilant concerning the current trend of attributing every problem we see around the globe to terrorism: here is clearly a risk of pollution of the development debate and there is a strong push to divert development resources for purposes that today do not sort under the ODA definition. But again, development is and always was intertwined with foreign policy. It needs to remain distinct, but not carve out a special area for itself.

Rather, development must fully play its role on the bigger, global scene. And we should have the self confidence to do so. Development cooperation is today better organized than ever before and it is the most tangible contribution to creating a better, safer and more decent world. And it does work - the only problem is that there is too little of it! We are, for once, in the comfortable situation that we don't need major policy shifts any more: we simply need more of the same. So, to all of you who are going to keep up the good work for a better, safer and more decent world; I can only say thank you for the good times gone by, keep up the excellent work and good luck.

| Haut |