Europe to focus on democracy and human rights in aid projects

European Union commissioner says economic development can't be sustainable unless human rights, democracy and good governance are at its forefront

guardian.co.uk, Mark Tran in Brussels, Thursday 13 October 2011

The EU commissioner for development, Andris Piebalgs, unveiled Europe's
 ‘agenda for change’ in Brussels on Thursday. Photograph: Yves Logghe/AP

The EU will place a far greater focus on democracy, human rights and governance in its aid programmes, after adopting a new development policy.

In unveiling the EU's "agenda for change" (pdf), Andris Piebalgs, the EU commissioner for development, said on Thursday that human rights and democracy were guarantors that economic development was sustainable.

The EU – the world's biggest donor of official development aid – will seek to promote democratic rights through "good governance and development contracts" set up between the EU and countries receiving general budget support.

"We will have a far stronger focus on democracy and will apply this approach more vigorously," said Piebalgs, adding that the unrest in north Africa clearly demonstrated that development could not proceed unless human rights and democracy were at its forefront.

The message was reinforced in a European commission document, which said: "Commitment to the fundamental values of human rights, democracy and rule of law is essential for the establishment of any partnership and co-operation between the EU and third countries. General budget support is seen, by its very nature, as an implicit recognition that the partner country's overall policy stance and political governance is on track."

A large chunk of EU aid is delivered in the form of general budget support – money that goes directly into the national treasury of recipient governments. In 2010, budget support represented 24% (€1.8bn) of all commitments from the EU budget. The EU as a whole is the biggest donor of official development aid. Last year, it provided €53.8bn (more than half of global aid). The European commission is responsible for the management of €11bn of aid a year.

Asked how the EU would deal with countries such as Rwanda and Ethiopia, where progress on development and authoritarian tendencies go hand in hand, Piebalgs acknowledged the difficulty in squaring the relevant circle. But he said it was important to engage governments in a "stable dialogue" where human rights issues can be addressed. He pointed to the EU's experience in Timor-Leste and Bangladesh, which have had their own human rights issues.

"We played a huge role in helping to strengthen democracy in those countries," said Piebalgs, pointing to the EU's role in easing rural poverty in Timor-Leste and in helping to build infrastructure in Bangladesh.

"As long-term progress can only be driven by internal forces, an approach centred on political and policy dialogue with all stakeholders will be pursued," said a commission document. "The mix and level of aid will depend on the country's situation, including its ability to conduct reforms."

Britain is currently having to deal with a development partner that has cracked down on internal dissent. The Department for International Development has suspended general budget support in Malawi over the expulsion of the British ambassador and the government's rough treatment of protesters.

While welcoming the focus on governance and human rights, NGOs expressed concern over EU plans to focus aid on fewer countries. ActionAid described proposals to shift resources away from so-called middle-income countries as "alarming". Piebalgs said the EU is in the process of developing "objective criteria", such as per capita income, to determine where to give money, with a desire to focus on the poorest countries and the most fragile states, such as Somalia.

The plans could see the EU cutting aid to countries such as South Africa, India and Ghana, where 75% of the world's poorest live. "The EU must acknowledge that with the majority of the world's poor living in middle-income countries, aid allocation cannot be based on GDP alone, and should ensure its own policies do not violate peoples' rights and jeopardise the EU's development objectives," said ActionAid.

Piebalgs said the EU had to consider where its development money could have the most impact, adding that countries such as Brazil, India and China were strong enough to tackle structural issues on their own. He added that the EU would continue to provide targeted aid to those countries – for HIV programmes, for example – through sector support.

Besides concentrating on fewer countries, the EU also plans to focus on what it considers key areas, such as social protection, energy and agriculture. Asked about accusations that huge EU agricultural subsidies are crowding out smallholder farmers in poor countries, Piebalgs said he favoured ending the subsidies but argued that such a move could only come through a successful conclusion to the Doha trade round.