1Sylviane Guillaumont Jeanneney
Our final session is devoted to Europe’s new horizons concerning development aid. There were two key events in 2011: the G20 Development Working Group and, as already mentioned, the High Level Forum on Aid Effectiveness, which took place in Busan. In the light of these events, it is interesting to see how European development or cooperation policy should be positioned. The final Declaration of the High Level Forum contained two conclusions which I consider important. The first is that, to make aid more effective, it is vital to revert to an essential principle of the Paris declaration, the “principle of alignment” of donors on the development strategy of beneficiary countries, in order to enable them to acquire ownership of their policy; ownership is considered a pre-condition for an effective policy. To that end, we need to implement a conditionality based on policy results and not on policy instruments. That proposal has long been promoted by Europe, which tried it out on its own budgetary aid, and Bernard Petit, who is here today, has done much to promote it. A second important conclusion of the Busan final declaration is the recognition that emerging countries are donors, providing aid while they are still developing countries, and that consequently, when they contribute to development aid, they are not obliged to accept all western donor principles. They will only do so on a voluntary basis. It was fairly difficult for the United States to accept that part of the resolution, which will have to be taken on board by European policy-makers.

2Europe has itself defined its policy for the coming years in two Commission communications dating from 2011: one is general and the other relates specifically to budgetary development aid. Three key ideas emerge from these documents.The first idea is that the primary goal of Europe’s development aid in the coming years will be poverty reduction, alongside the goal of establishing democracy in beneficiary countries in order to safeguard human rights and foster good governance. The second idea is that it will be necessary to conclude multiple partnerships, particularly with the new emerging countries and civil society. The third idea in these documents is that Europe is not only an aid donor, but pursues a whole range of policies that also affect the development of countries receiving aid, so it will be extremely important in the future to coordinate those policies with development aid policy.

3Taking account of both the Busan Forum conclusions and those of the European Commission’s communications, I suggest that this panel should try to answer three types of questions, although of course they are free to mention others. The first question is how to reconcile the desire for democracy and good governance with the stated aim of alignment and respect for the sovereignty of countries receiving aid. I ask this question because Europe wants to develop its budgetary aid, which should logically be subject to conditions relating to results, as stated by Bernard Petit in the previous session. But at the same time, Europe states that there will be criteria governing eligibility for this budgetary aid, and the overall economic policy of a country forms part of that, as Europe has to ensure not only budgetary transparency, which seems perfectly reasonable for budgetary aid, but also the quality of macroeconomic policy, social policy, industrial policy, etc. So in the end, it covers all the economic policy decisions concerned. I think there is a problem of consistency with the “principle of alignment” here.

4My second question is how should European aid be combined with other aid? First, with bilateral aid from European countries. Bernard Petit told us that there is now a consensus between Europe and the EU Member States on development aid objectives. That is important, but in practice, when it comes to the development projects to be conducted in a particular country, does Europe act to supplement bilateral aid or, conversely, does it try to act as the leader? What happens in practice, on the ground? There is also the question of cooperation with other multilateral donors, notably the World Bank. In the 1990s, Europe went its own way, strongly criticising the structural adjustment policies imposed on Africa. I get the impression that we are now seeing Europe largely falling into line with the World Bank’s view. In the current context of the financial crisis affecting developed countries, and its impact on developing countries, should Europe propose original solutions or concur with the World Bank’s proposals? Moreover, should the intervention by emerging countries, and particularly China, cause Europe to modify its own intervention principles or continue going its own sweet way, while leaving China to act alongside it? How do we combine European aid with aid from the new donors?

5My third question is this: Europe says that it wants consistent policies, knowing that aid policy is only one of the measures affecting developing countries. Will the Lisbon Treaty actually be implemented to ensure proper consistency? As an outside observer, I see some contradictions. For example, Europe favours the regional integration of the countries of the South, considering it important to create large internal markets, but at the same time it has signed EPAs with a country belonging to a union: I am thinking of Ivory Coast in the West African Monetary Union. Similarly, the common agricultural policy already mentioned this afternoon is sometimes at odds with development aid policy. For example, Mali and Burkina Faso are currently trying – together with other Sahel countries – to get compensation from the WTO for subsidies that industrialised countries grant to their cotton producers. What is Europe’s position on this? Will it support African countries in the WTO?

6I think that the people around this table know much more about all these questions than I do, and perhaps they may have some answers. In a meeting like this, I think it is best for the people from the countries of the South to speak first, because after all those countries are the ones most concerned with development aid. At many meetings on development aid, we hear mainly from the donors, and that is surprising. So today, I am going to call on Mr Tertius Zongo to speak first, because he represents a least developed country (LDC), and we know that those are the countries for which development aid is most important. Even though official development aid only accounts for 13% of international development funding, as Hillary Clinton said at the Busan Forum, development aid is still a major issue for the LDCs. I will ask Mr Omar Kabbaj to speak next. As adviser to the King of Morocco, he represents a middle income country. After that, I shall call on the donors to speak, and finally the European representatives will be able to give us their own ideas on future European policy.

7Tertius Zongo
Thank you, I think that the way in which Ms Guillaumont introduced her panel is in line with our basic intentions but, that said, I would like to congratulate the organisers of this meeting because when I saw the list of speakers I was pleased to see that they were a mixed group of researchers, i.e. academics and practitioners. That is somewhat unusual. We often think of academics shut away in their ivory towers, not thinking that anyone outside can contribute much, while those outside think that academics are in a world of their own. I also appreciate the approach proposed by the organisers, enabling us to have our say first. That is why, in my presentation, I am going to tell you a bit about the history of aid to ensure a better understanding of the various viewpoints and to answer the questions which have been raised.

8You know that nowadays we talk about aid effectiveness, but that is not a new subject. So why do we talk about aid effectiveness? The question can be basically summed up as follows: what is the purpose of aid? What is the justification for aid? And on the first panel this morning there was the question: how do we assess its effectiveness, and in what way is it effective? Briefly, looking back over the years, there have been three main lines of thinking about aid. First, in the beginning, the justification had much more to do with solidarity. It was a question of emphasising the ethics of things, the ethical imperative of solidarity which is the reason why the rich nations should help people in developing countries.

9After that, there was a much greater focus on political motives based on historical links between the old colonial powers and the newly independent territories, the Cold War and the battle between the two ideological blocs. How to keep all the developing countries attached to a bloc? That was the objective.

10Later, there were other justifications. There were economic and financial reasons justifying aid, but also reasons no-one talks about much, namely motives based on aid’s potential contribution to stability, security and peace.

11What do the developed nations say to themselves? If we help those who are struggling, the decline in world poverty will open up new markets, which will in turn benefit our businesses. That is an economic and financial motive. Second, if we leave them in this state of poverty, the corollary is not obvious, but poverty and destitution create terrorism and insecurity. And one of the speeches by the former President of the World Bank, James Wolfensohn, alludes to that. Basically, he said that the world is currently devoting $ 900 billion to military expenditure and only $ 60 billion to development aid; if those figures were reversed, we would probably have far less poverty, insecurity and terrorism. It is true that terrorism sometimes has complex ideological and political causes, but mass poverty also fosters a climate of social and economic insecurity, and anger, in which ideas propagated by terrorists spread very easily. The aid objectives therefore have underlying motives, concerning stability, peace and security.

12Aid also takes various forms. Aid has been delivered in various ways depending on its justification and purpose, ranging from humanitarian aid – which was based primarily on the principle of solidarity – to aid in its current forms.

13Some panellists mentioned project aid; after that we saw a switch towards programme aid, and as Ms Guillaumont said, there has been a qualitative change towards sectoral and global budgetary aid. But how can we assess the effectiveness of aid today? In reality, when we look at developed countries, I do not mean that they are becoming weary, but there is a sort of impatience when faced with the results. Looking back at how the Marshall Plan worked, how it rescued Europe from its difficulties, when the same donors give money to developing countries today they wonder why they are giving it to countries that are incapable of overcoming their problems. So the key question today is a question of time: how long does it take to produce results, and what results do we want to see?

14On that basis, we can very quickly discuss aid effectiveness. I feel that donor countries say to themselves that to get results in practice within a particular time scale, we have to impose conditions: I will give you aid, but you must do this and that. The issue concerning conditions relates to something which seems obvious. If you meet these conditions your position will change. In reality, however, it is not always obvious. The conditions may be met but the position does not change because, as I said, the first condition is the country’s desire to overcome its problems. How do the people in charge organise themselves to get out of their situation? It is not a question of telling them what they must do to achieve that, but of assisting them. However, it must be said that attitudes have changed a great deal. Today everyone agrees, and I think it is an important step, that we need to focus more on results, results that have a positive impact on people’s living conditions.

15That is a point that I might dwell on, perhaps. Also, I think that we need to look at recent lessons, because there has been renewed attention to the question of aid. Look at the various conferences that have taken place, the conference on the Millennium Development Goals at Deauville, the Monterrey Conference on Financing, the conferences in Paris, Busan, and South Korea on aid effectiveness, and in Marrakech on harmonisation, etc.

16The first point is to welcome these many conferences bringing people together for their mutual benefit. The second point is that, at these meetings, there was a strong desire to ensure that aid is effective. Now how do we measure effectiveness? That’s another question. We shall doubtless address that in the discussions.

17The third point, which I find just as important when we are talking about aid, concerns the players. Looking back into the past, who was involved? The government and the donors. Nowadays, in the debate on aid, we increasingly have governments, donors, civil society, the private sector and parliaments. The players have become more diverse, and that is a strength. Regarding the donors, Ms Guillaumont pointed out that – as the Busan experience proved – you have some emerging countries such as China and India which were not involved in these large forums, and which came and imposed a number of conditions in order to be involved in the conclusions of this meeting on aid effectiveness. So we have some new players here, even in terms of technical and financial partners. The other point concerning the partners is that countries which used to be solely aid beneficiaries are now donor countries, so they understand both sides of the question. The other key point is the introduction of globalising strategies in the pursuit of aid effectiveness. They amount to saying: “Let’s boost capacity and support national development policies”, i.e.: how can we support the countries themselves so that they bring about their own development?

18These questions of perspective lead us to consider the environment in which these economies develop. How do we take that into account? And what is the immediate environment? It is the economic crisis, the debt crisis. In that situation, what are the prospects for cooperation? The immediate political environment concerns events in North Africa and the Middle East. How do we incorporate those as essential elements when we want to talk about the aid prospects? Recent factors concern climate change, what are we doing about that? In Africa, the recent factors also include population issues that we must not ignore. What are we doing? These are very young populations; what are the development cooperation strategies in the face of youth unemployment?

19I would like to mention a few points made by the European Commission on the purpose of aid, which remind us that aid means helping to make the economic environment more favourable to economic activity, i.e. aid is only a stimulus, it is not a magic ingredient that brings about development. The important thing is for the countries themselves to understand the essential points, it is for them to reconcile short-, medium- and long-term concerns via a shared vision, an inclusive approach that involves ordinary people in devising a genuine national development strategy.

20Now, together with this view of development, we have to move towards new partnerships to meet the enormous needs. However, I think the first point here must be respect for the commitments given. As Ms Guillaumont said, when we are considering the question of harmonisation and alignment, we have to ask how far we have got. We took stock of the situation in Busan. Only one of the thirteen indicators defined has been respected.

21And when we review the causes of the failure to abide by the commitments, it is not the fault of the developing countries. If we consider the commitment concerning alignment with national systems, we hear donors say that they want alignment, but when we look at the facts there is no-one willing to do it. However, I must acknowledge that the European Union has made a major effort on this front.

22When we say: “Ensure that there is a division of labour, so that everyone does what they are best at”, we realise that everyone wants to do what they want, not what they can do with others to produce results. So let us first respect existing commitments.

23The second point is that we realise that we need to look for other funding sources, and I think that France is making progress here with the tax on airline tickets and many other new funding instruments that need to be introduced, because traditional development aid is not enough nowadays.

24The third point concerns strengthening human and institutional capabilities. We must also agree to encourage South-South cooperation. What is that? Today we have the China-Africa and India-Africa summits that we should view as offering potential for change and development, instead of resisting them. We have other summits that enable South-South cooperation to find ways of achieving development, and we need to encourage them. We must move towards greater involvement of civil society and the private sector. In that regard, I welcome the statement by Mr Olivier Cattaneo pointing out that we need more private sector participation to boost development.

25Today, when you have discussions with partners, they rightly talk to you about accountability. But who should our governments be accountable to? Are we accountable to the donors? No, we must be accountable to our people, and our parliaments, but we must respect our commitments to our partners. That means that we must succeed in developing local capacity so that the population can take part in defining, implementing and monitoring the policies. At that level, I would like to encourage the French Development Agency to continue its involvement in financing decentralisation and strengthening local authorities. It is a route to good governance which will enable everyone to play their part.

26Another point that the donors rightly like to mention concerns ensuring that the funds they provide are well spent. We have said that official development aid cannot, in itself, bring about a country’s development, we need public spending that is efficient overall. We need to ensure that aid is not just a transfer of money, but forms part of a more comprehensive programme that includes the strengthening of capability, managed by the country itself to the satisfaction of all parties. Nor must we put the sole emphasis on spending, there must also be a focus on revenue. Improving the use of revenue is the best way of achieving greater independence and accountability. There can be no effective development aid policy which will help our countries out of poverty and dependence without an accompanying trade policy.

27When we talk about development aid, it is common to find that people only look at money transfers for carrying out projects, but the European Commission reminds us that the purpose of aid is to improve the economic environment, to make it more favourable to economic activity. So if economic activity improves, you produce more. So we need to ensure access to the markets. However: go to Geneva and see what happens in the trade negotiations.

28All the countries that were in the same position as the African countries 50 years ago, such as South Korea and China, and which are now developed, managed to link development aid to trade policy. We can only talk about development if development aid permits an increase in the countries’ supply capability, and if the question of market access is treated more fairly.

29Of course, we must set a number of priorities. I can see some, such as food self-sufficiency. Food security must be one of the key points in the coming years. Then there are questions concerning education and health. Regarding education policies, I don’t see them in their current form, I want to see an education that brings about a change of mentality, a change of behaviour, because today, when we see our young people leaving school, especially in our French-speaking area, you get the feeling that school inculcates an institutional attitude rather than entrepreneurship, i.e. a tendency to take a job as an employee rather than be self-employed.

30We need to change behaviour. And we must invest in that change in behaviour for the years ahead. Questions concerning water, sanitation and security are still priority issues.

31I shall stop there and answer a question from Ms Guillaumont. It is indeed quite obvious that questions of democracy are becoming increasingly important in the dialogue on aid policy, and that is the point that I am answering. How do we stop these totally natural and sensible requirements becoming political conditions? If you look at the European Union, in the new definitions, the agreements under discussion are to be renamed and become good governance agreements. I believe the best way of introducing political conditions is to permit the participation of civil society, the private sector, in devising and monitoring policies, but also in strengthening the role of Parliament in supervising the government’s activities. I don’t see how Europe can monitor political conditionality on the ground. Instead, I see that the further we go towards participative democracy by strengthening the ability of the players to bring pressure and to insist on transparency, the more effective we shall be on the ground. Let us enable countries to take charge for themselves rather than being submitted to the imposition of political conditions which will create problems in varying degrees, because they do not bring the necessary endogenous structural reforms.

32Omar Kabbaj
First, like the other speakers, I would like to thank the IGPDE and the AFD for organising this symposium. As we are celebrating the 70^th anniversary of the AFD, and we have unfortunately not talked a lot about the AFD today, I would like to say how I have been associated with this organisation for six years, and with Ms Guillaumont, who has been there much longer. I have witnessed amazing progress in those six years, not just in terms of volume and the quality of the institution’s human resources, but also its geographical influence, which is much greater than it was a few years ago. I just wanted to make that point.

33I would like to begin by saying that this meeting is taking place at a crucial time for the world and for official development aid. Yesterday and today we have seen the threat of a ratings agency downgrade for the European Community and the EIB, and tomorrow that may apply to other multilateral institutions. So I find it difficult in this situation to envisage the future that we on this panel would like to see.

34I would also like to draw attention to Professor Bossuat’s reference to the Marshall Plan this morning. I think the Marshall Plan represented more than 5 or 6% of US GDP over several years, whereas official development aid currently averages less than 0.4% of donor countries’ GDP. What does the future hold, in view of the situation I just mentioned? It is unfortunate, but we have to live with it.

35We have talked a lot about ACP countries but not other regions of the world, and particularly the Mediterranean region. As Tertius Zongo talked a bit more about sub-Saharan Africa, I propose to confine myself to the Mediterranean region, where significant changes are in progress, taking my own country, Morocco, as an example. The problems of these countries are similar, and the European Community has always treated them in the same way, with the same type of agreements, often using Morocco as a model or guinea pig.

36Relations with the European Union are currently excellent, with an Advanced Status regime which is the highest level before full membership; that has been the case since 2008, but relations have not always been at that level. As Morocco gained independence back in 1955, it did not qualify for the association agreements offered to overseas territories. In 1963, it made a strong political gesture and applied for full accession to the European Economic Community. There was no response to that application, and it was only three years later, in 1966, that negotiations began. The negotiations were launched a few days after the first Russian submarine entered the Mediterranean (as stated by our ambassador in Brussels at the time). That was perhaps an historical secret that served as a wake-up call for the Community. But the negotiations were very soon disrupted by France’s empty chair policy at the time, and were not concluded until 1969, six years after the original application. So relations have not always been as excellent as they are now.

37This first agreement was an association agreement, as they were known at the time, and was extended to Tunisia, Egypt and other countries in the region. It was essentially a trade agreement, and although it made some tariff concessions it was confined to certain products and was littered with restrictions concerning quotas and dates, etc. In 1976, a cooperation agreement (by contrast to the first agreement of 1969 which was merely commercial) had introduced a clause that was favourable to Morocco in that it granted access for Moroccan industrial products, except agri-industrial products, free of duty and without restriction.

38Immediately after the agreement was concluded, textile imports were stopped altogether because there was a crisis at the time in France and in other countries; the ban even covered products which had already been shipped.

39I wanted to give this historical account to supplement what was said this morning about the history of relations between countries. I should stress that this type of agreement, which applied to almost all countries in the region, did not include any Stabex formula or any system of generalised preferences benefiting other countries, by definition.

40Since then, more recent agreements have included useful financial arrangements, such as compensation for fishing in Moroccan territorial waters, the neighbourhood facilities, EIB funding via the FEMIP, for which I thank my friend Fontaine Vive. Since the beginning of the 2000s, Morocco has embarked on a massive reform programme with a view to preserving the macroeconomic framework and launching major development programmes in all economic sectors. The Moroccan INDH (national human development initiative) programme has also brought social benefits.

41What might we be able to do now to improve these relations still further? I believe that trade is vital. It is absolutely essential to be able to improve on the trade that we have. For example, in the last agreement Morocco offered duty-free access for all European industrial products; that will be fully effective from next year. So we have been cutting customs duties every year for the past five years.

42There will be zero duty on industrial products next year. Yet the European Union is maintaining restrictions on agri-industrial products and still applying set dates for agricultural products, such as tomatoes. There are many things that we ought to look at. I think that would enable us to achieve a more balanced relationship.

43There is another possibility, along the lines of what the IMF does, since it is currently considering the matter: we might restore some kind of facilities compensating for imbalances in current market prices. To give you an example, Morocco’s energy imports, taking all forms together, are equivalent to 200% of its total exports of phosphates and derivatives. Twice as much is spent on energy imports. It would help if the European Union could do a little bit towards resolving these problems, not to mention wheat that is imported mainly from Europe, and sugar, too.

44My other suggestion concerns cooperation with emerging countries, which is also in line with what the EU wants, because there is some sympathy for Morocco in the Gulf states, for example, where we could establish bilateral or trilateral relations. We can also envisage some form of cooperation on site; that already exists between the Mediterranean region – particularly Morocco and sub-Saharan Africa – and the European Union. Obviously, there is the tax on financial transactions; perhaps the EU might be able to exert more pressure to get that implemented. As a member of the UN Secretary General’s Committee on Water, perhaps the EU could secure an increase in the funding for water and sanitation, because not only is it a problem that is becoming very serious at global level, but also the Mediterranean region has the lowest water coefficient in the world. It is a region where it is absolutely vital to do something about that. We must also establish strong links with the private sector and civil society; that could replace actual aid to some extent.

45That is more or less what I wanted to say. To answer one of the questions from Sylviane Guillaumont, on relations between the EU and multilateral organisations, particularly the World Bank and the IMF, I think – and I am very sorry to tell my friend Bernard Petit – when it is said that the World Bank and the IMF are bad and all the others are good, I do not agree. First, I will pick up on what he said himself, namely that the countries which say these things in the European Union go to the IMF to say that the problems absolutely must be resolved. And that is not only true for our regions. It is true for Greece, etc. I don’t want to become an advocate for the IMF, but there is the borrowing requirement. It’s what we’re doing with Greece now. At the time, I heard a lot of ministers saying to Fund officials: “But why do you want to fix my deficit at 10%, it’s a matter of sovereignty”. Now that is finished, no-one says that any more. Everyone understands that budget deficits are bad, but at the time that was the general view. The IMF approached Philippe de Fontaine Vive to ask how much the Paris Club was going to contibute. He went and asked the banks how much they were going to give, even though there was not much bank lending in sub-Saharan Africa.

46There was no debt reduction, there was not as yet any Baker plan, or Brady plan, etc. They turned up with a report on the balance of payments, saying to the minister: “I am quite happy for you to do 10%, but explain to me how you are going to do it, bearing in mind the resources that you have, including internal resources.” Perhaps it’s a question of arithmetic, perhaps it’s stupid, but they had no choice and there were performance criteria every quarter. It is what is happening now with Greece. And these figures are linked to performance criteria: if you miss the target, even by € 1 000, you cannot withdraw any resources from the Fund.

47I believe in cooperation between donors. I have always believed in it, and that is what is happening now in all countries. All the agencies of the European Union, the World Bank, the IMF, etc. are everywhere and work in harmony. Of course, they need countries to cooperate, and, as Tertius Zongo said, we must try to find some way of reconciling the desire for governance with respect for sovereignty. It isn’t easy. As for me, I am in favour of international cooperation.

48Philippe de Fontaine Vive
I am going to try to speak first [before answering Ms Guillaumont’s questions], and that will be all the easier in that I agree entirely with what the last two speakers said before me. We can continue the dialogue on a consensual basis. I would like to start by thanking the organisers and wishing the French Development Agency a happy anniversary. It is a pleasure to be back among friends in this room where at times we hold meetings of the Paris Club, so we are effectively in the bad guys’ camp, and where at other times we support the Paris Declaration and the French Development Agency, so (even though what we are doing is in fact the same) we find ourselves in the camp of those who give aid. The second reason to thank you for inviting me today is that, even if we still need to keep an eye on our mobile mail, it is good to think about something other than the financial crisis and our rating downgrades. When we are referring to development aid issues, we also need to bear in mind this general backdrop. Money is scarce, it is becoming ever more so. I don’t want to put a damper on everyone’s hopes, but in the end the coming decade looks set to be particularly difficult, so it would be better to have an agenda on which we more or less agree so that we can make progress instead of arguing with one another.

49When you propose “more Europe” as the new perspective, the new horizon (because that is the title of this panel), that pleases me, and it also surprises me, for two reasons. The first is something to do with what I have heard today: it is as if Europe were somewhere else, as if there were France and the French, and Europe. As if Europe existed separately from France, Germany, Britain and the other Member States. All the same, that is extraordinary now that there is a Community instrument with its own well-understood logic. But Europe does not exist separately from the 27 Member States¹. Let us just be a little careful in how we present things. There are, of course, in Europe, politicians who will have their say. People who embody the Commission’s pioneering spirit, and people with more specific jobs, like the European Investment Bank. To put it simply, the EIB has the same relationship to its subjects and to the High Representative of the European Union as the French Development Agency has to the French Government. That is the parallel that we must bear in mind.

50We are Europe’s banker, geared particularly to the duty of solidarity with the rest of the world, but that is not all we are. So there are some of your questions, Ms Guillaumont, that I would like to refer to those who know more about politics than me, even if tomorrow, when I catch the plane to Tunis to meet the current prime minister and his successor in a few days, I shall need to talk about politics a little all the same, because we cannot make good policies without good finance. Greece is there to remind us of that, and perhaps other countries, too.

51The second reason why I was a bit surprised when we mentioned Europe as a new perspective for French cooperation policy was because they have been coexisting for 53 years, so it is a bit surprising. It is what I said to myself, even though I am obviously well acquainted with Dov Zerah and the French Development Agency, when I read the latest parliamentary report on the French Development Agency written by Mr Christian Cambon and Mr André Vantomme, an excellent, informative report, but which say: “the French Development Agency is the secular arm of French diplomacy, the AFD is a bit of everything, people often call French cooperation a sort of Swiss army knife”. A nice tribute to the fact that one can do anything at the AFD, which is very good. I would prefer the next parliamentary report to be able to talk about a French standard bearer for European cooperation. That would please me more, i.e. that Europe is becoming an integral part of French policy, and not something outside it. I have read as far as Annex VII of that report, and if you go to Annex VII you will see the letter of assignment issued by the French Prime Minister for the Director General of the French Development Agency, i.e. Mr Fillon, dated 21 September 2010 and, to my great surprise, there is no mention of Europe. Yet we hear the current French President often talking about Europe nowadays. You will hear that on television this evening, I think, or tomorrow. Surprisingly, when he signed the triennial letter of assignment for the director general of the French Development Agency, there was no mention of Europe at all. I am counting on Dov to ensure that in the next letter of assignment Europe has a vital role, because in my opinion Europe represents three perspectives on its own, to answer some of Ms Guillaumont’s questions.

52The first perspective is the Union. Today, we cannot achieve anything so long as we remain scattered as we are at present. The statistics show that aid from Europeans represents 55% or even more of global official aid, yet the reality seen from Burkina Faso, from Morocco and from elsewhere is that Europe is absent, because Europe is not an entity, Europe is scattered, Europe has its own little programme and that is what you were referring to just now. France has its programme, Germany has its programme, the EIB has its programme, etc. And what is more, as if we were not scattered enough, totalling thirty altogether (the 27 Member States plus the various financial institutions), we go and spend the money by entrusting it to New York, Washington, or Geneva, international organisations, etc. In all, there is nothing visible about what the EU does. We must do something, we have made a start because it is good to say what needs doing, but we still need to set an example. So, we decided to trust the French Development Agency, i.e. the AFD, and its German counterpart, the KFW; we concluded an agreement of mutual trust because our ultimate aim is that when we go to a non-European country, our teams work together and avoid duplicating or triplicating procedures, meetings with ministers, technical analyses, tenders. All that bureaucracy so that we appear as a European face, sometimes in the form of the head of the AFD, at other times the KFW or the EIB, and anyone else who wants to join in. That is essential.

53Your second question, Ms Guillaumont, still to do with the European Union perspective: where does the European Commission want to position itself? I must admit I shall listen with interest to our two friends from the European Commission; as for me, I don’t know, but I work with them every day. They are undecided between two models, depending on the general directorate, the time and the people concerned: they may take the Union approach that I have just mentioned, namely that the High Representative decides on policy while the handling of the money is delegated to key operators such as the AFD in France, or the KFW in Germany, i.e. people who know how to set up projects. This is a possible model for Europe but it is not the one that exists today. In the second model, the European Commission wants not only to coordinate the policies of the Member States but also wants a level playing field which means that they can choose as operator the World Bank or a UN Agency, and not only an EU Agency.

54I don’t like this second approach, but it is somewhat similar to what we have at present. Which model will Brussels choose? The model combining good coordination with delegation, or the model which invites bids in the name of a level playing field?

55Second perspective: we must be efficient. As previous speakers have already talked about this, I shall be much briefer on this aspect. But public money is a scarce resource. Our taxpayers have less and less to devote to public policies. So we who control this public money must consistently strive to ensure maximum efficiency, and I would reiterate what General de Gaulle said, some years ago, though in much briefer terms. To fulfil this duty of solidarity, he set up the Caisse centrale de coopération économique, i.e. instead of scattering donations in a rather haphazard way, he wanted to create an instrument that would ensure a rational approach; today, that has been renamed the French Development Agency. The six European countries that signed the Treaty of Rome in 1958 did the same thing. Instead of saying to themselves that they would scatter the donations around in the form of structural or other funds, they set up the European Investment Bank, and when giving aid to third parties they required them demonstrate a professional approach. So this question of effectiveness is not new, and today, when public money is increasingly scarce, we owe it to everyone to be as economical as possible with the cost of our aid measures. We must ensure that as much as possible of the money entrusted to us reaches the beneficiary countries, and doesn’t go on administration costs within our organisation; that is a real risk that applies to everyone.

56The third European perspective was mentioned by Omar Kabbaj, namely the need to innovate. We have our customary bilateral, international cooperation, that exists and is important. For some things, it is irreplaceable. But I would say that it is largely outdated in the modern world, which is not only multilateral but is also much less hierarchical. You can see it in French society. We can see it in European society, where private foundations have gained an importance that they never used to have. Relations with local authorities, that Omar Kabbaj talked about, have become important.

57Bernard Petit mentioned an innovation that also concerned direct funding for associations which are viable and more efficient than government agencies for small projects in the field. These are all new ideas that need to be developed, I feel, and the same applies to public-private partnerships, but we need to help the governments of developing countries to stand up to the big international groups with whom they cannot negotiate intelligently because they do not have the resources. And that is why, to take the example of the Mediterranean, we decided to give the Mediterranean countries temporary access – for a year or 18 months – to the logistics at our disposal in Europe, at the EIB, on public-private partnerships, to enable them to negotiate better with big international groups.

58And the capital ? Loans are not the only way. I have hardly heard about anything else except loans and guarantees. There has to be money that can take risks, that can be invested in developing countries. We need equity, to use the English word. Be it in microfinance for small projects or in much more significant investments, even though Europe is currently beset by a crisis, we must use our financial clout to encourage those who are willing to take risks in developing countries to actually take those risks; that is the way to speed up development. I shall finish there.

59Dov Zerah
We are celebrating our 70^th anniversary. 18 months after his Appeal, General de Gaulle realised that, as he wanted to establish a state, at a time when some parts of France’s empire had already been recovered, he needed a central bank and a Treasury department. Since the Banque de France was in Paris and its doors were closed, and the Treasury department – which at that time was called the Directorate General of Public Funds – was in Vichy, he set up the Caisse centrale de la France libre in London on 2 December 1941. I should also say that, in our business culture, we are genetically resistant to poverty and willing to fight for development. Things have changed, and today we are an agency. But the aim here is not to talk about the AFD.

60The first directors of the Agency were convinced Europeans, particularly in the case of our founder, Pierre Denis, who was one of Jean Monnet’s fellow travellers. From the start, the Agency was resolutely and deliberately European. I must say that there are at least three points which need to be stressed concerning the European Union.

61First, European aid and cooperation formed one of the first common policies. That was established in the 1960s, at the same time as the common agricultural policy and the common commercial policy. Development aid policy was the first to be established, before regional policy, and before all the other common policies that only appeared in the early 1990s, when the single European market was created.

62The second fundamental point, which must never be forgotten, is that the policy was based on partnership with the ACP countries, via the Yaoundé and Lomé conventions. That point is important. The conventions created a number of mechanisms which we would still do well to take as a model today: I am referring to Stabex and Sysmin.

63I would like to draw attention to the reform which took place in the 2000s, when the European Commission decided to allot funds to Community donors. We, the French Development Agency, and the KFW, are the two bilateral banks that received the most from that allocation arrangement. Since 2008, the Commission has allotted € 120 million to the AFD. It is very simple: the Commission knows the areas in which we have skills and expertise. Traditionally, that means agricultural development, for example. So we have numerous allocations of funds from the European Commission, e.g. for the management of irrigation zones in Senegal or Mali. But the opposite is also true. We also hand over funds to the European Commission for collective management, because in a country such as Haiti, for example, following the terrible earthquake, bilateral cooperation, however extensive, cannot do everything on its own. It is therefore vital to pool resources and entrust them to multilateral institutions such as the Commission or the World Bank.

64Finally, I must mention our agreement on the mutual recognition of procedures between the KFW, the Agency and the EIB. I would like to cite a very simple example, to make it easier to understand the mechanism. The large city of Tunis needs an urban transport network. We set up a dossier with all that that entails and submit it to the KFW and the EIB, which accept it. From then on, we are the project leader even if we have contributed the smallest amount of funding. The European Commission joins us in that via the Neighbourhood Investment Facility. And then crucially, on 10 December 2010, we signed a single document with the Tunisian authorities in Tunis. There were four of us signing one document, and I think that, in terms of effectiveness, that is a vital point for future progress.

65On conditionality, I shall keep it simple at the risk of being a bit provocative and distancing myself from my friend, Tertius Zongo. It is not possible to do without economic and political conditionality any longer. Today, our fellow citizens expect us to be accountable for what we do, why we do it, how we do it, what we cannot do; we can no longer close our eyes to a number of economic and political practices. The only way is a multilateral approach; there must be Europe and only Europe. It is thanks to Europe that these political and economic conditions can be imposed.

66That was the reason for forming the Paris Club in the 1950s. It was formed to prevent the bilateral management of a country’s debt from forcing the country to agree to a number of conditions. We could not have done what was done in Ivory Coast and Libya without the UN Security Council resolutions. We must be clear today, and recent events demonstrate that. We may criticise global governance, we may think that it is not progressing far or fast enough. But if there is one sphere in which global governance has proved effective in recent weeks, it is in crisis management in certain countries.

67The international community took prompt action to draw up a number of lists, sanctions, and measures, and those are all key elements. And we need more of Europe here. When I was a young financial attaché in Brussels in 1984-1986, with a seat on the Development Committee and all the ACP bodies, there were ten of us; it was easy to create an identity when there were ten of us round the table, but with twenty-seven it is more complicated. On the EIB board of directors it is hard to agree on common positions when there are twenty-seven of us round the table. All the same, we need more of Europe when it comes to these economic and political conditions.

68On the emerging countries, I understand that, during the day, there have been some adverse comments about China. That is wrong, and I will tell you why. Today, sub-Saharan Africa has a population of 850 million, and in 2050 the figure will be 1.8 to 2 billion. Sub-Saharan Africa is the continent which will see the biggest population growth. If we cannot achieve the economic development of sub-Saharan Africa in forty years, there is no need to have long discussions on the potential consequences or collateral effects in Europe. There is an urgent need for all European countries to ensure that economic development takes place in sub-Saharan Africa, and the Chinese are welcome.

69Of course, we may not be pleased that they have attached a particular condition to a commercial loan. We may be unhappy that they have won a tender without meeting all the criteria. That is possible, it is not untrue, but they are making major efforts to change. Three weeks ago I had lengthy talks in Beijing with the Chinese Finance Minister. They are aware that their brand image in Africa is not good, and they want to work with us, the French, with us, the Europeans, and that is a fundamentally positive and important point. We shall need the Indians, Brazilians, South Africans who also want to invest in the development of sub-Saharan Africa. We need them all, and we have to proceed in accordance with the Paris Declaration, which set out the principles to ensure that we maximise efficiency.

70Just before I finish, I am going to talk about one of my pet subjects: cotton. In June 2002 I wrote an article in Le Monde calling attention to US subsidies. During the first decade of this century, US production increased by 40%, Chinese production by 60% and Indian production by 100%. Over the same period, production in sub-Saharan Africa was halved. We can find all the explanations we want in the subsidies, especially the subsidies that the Chinese and Indians can grant because they still have developing country status, which means that their subsidies do not attract as much criticism as those granted by other economic groups.

71I would simply say: the Americans, Chinese, Indians or Europeans – and especially the latter, for reasons concerning land use planning in Spain and Greece – grant subsidies to their cotton growers, and why shouldn’t they, but there must be compensation for the Africans. It is vital. We cannot stress the merits of international trade and increasing globalisation while leaving at risk a sector so crucial to economic activity in certain regions of sub-Saharan Africa, just because there are subsidies that distort markets and prices.

72To conclude, I would say that wanting “more Europe” does not mean that European aid should be reduced to its Community form. No, European aid must acquire an identity, and today that identity might perhaps entail closer partnership with the EIB or with bilateral agencies such as the AFD or the KFW. The bilateral players are essential because they have extensive experience and great legitimacy on a number of subjects. More Europe means better Europe in harmonious interaction between the European Commission and the bilateral donors.

73Dieter Frisch
I would like to say that we are not spokesmen for the current Union. We no longer have the influence that we may once have had. We have opinions on what happens and on what could happen. We are all free agents, otherwise Bernard Petit could not have said certain things, and neither could I. I would like to take the opportunity to say that I am pleased it was possible to include the subject of France/Europe/Africa/development cooperation on the agenda, despite the letter of assignment by Mr Fillon, which does not mention Europe, though it is in fact there. I am surprised at the attention which this subject has attracted, and at the number of people who have spent a day with us on these topics.

74In the end, there is so much to be said. When I see the term “new horizons”, I say: let us continue down the road that we have taken, innovating, going farther and adapting to changing circumstances without imagining – as politicians sometimes do – that we always need to break off and start from scratch again, heading for something new. If we look at successive conventions, we see that we no longer recognise that conventions such as Lomé I and Cotonou are more or less about the same thing, or about the same group of countries, because things have changed so much during the negotiations. For my part, I want that to be the case in the future, that those who are currently in charge take the time to assess what has been done, and what is not working, so that they put things right and make progress.

75As regards the route already mapped out by the 2005 consensus, mentioned by Bernard Petit, this consensus on the broad outline of a common policy, i.e. the Member States plus the Community, I would like that route to be followed in practice. That means the code of conduct which the ministers approved a year or two later, when they said: “we are now going to coordinate our policies and progress towards a genuine division of labour”. There is a huge amount to be done here. We certainly need to start with the Community framework. We don’t need to get everyone round the table straightaway, that will never work. There are already enough of us in the current European Union to make it very difficult to arrange coordination and a division of labour, but we need to start here, as the Commission does not claim any leadership in that respect. Its role is to act as a stimulus, but if anyone else has any good ideas, they’re always welcome.

76There is no need for anyone to have a monopoly. Nor do I think that there is a need for more centralisation in the management of public funds. When I was young, we managed around 5 to 7% of all the aid provided by the Member States. Today it is around 20%, and I always felt that 20% was about the critical mass needed for the Commission to be a genuine actor, but instruments should simply be coordinated rather than centralised for the remainder of the aid budget. Because if the Commission reaches the limit of its management capability and hands out money from the budget or the Community EDF to other multilateral agencies, as is unfortunately the case, then I think we have taken the wrong road. The Commission is not there to manage a transit budget where money comes in and goes out again to the FAO, the UNDP, etc., which are certainly not more efficient than us.

77On the question of conditionality, I shall actually refer to China. I was a bit surprised at what Dov Zerah said, at the end, about the fact that we cannot do without conditionality, whereas I am highly critical of the concept of conditionality today. But I don’t know whether we are talking about the same thing. I think that if we are, then we should be more in agreement, because the conditionality which was applied as a policy of conditions imposed on countries to make them carry out a particular type of structural reforms, say under the Washington consensus, that conditionality never worked. The World Bank has long since recognised that a structural reform that is not discussed, desired, owned and accepted by the country in question is not sustainable, and cannot last. So we wanted to avoid that sort of conditionality and replace it with the concept of dialogue, and reciprocal commitments. A country respects a reciprocal commitment not because we force it to do so but because it is convinced that it is the way to go. I accept conditionality in a single, very specific case, i.e. for countries which, wishing to join the European Union, have to pay the price for joining the club. I don’t hesitate to use the term in that case.

78In relations with third countries, I would be very hesitant. I still believe that we need to do a lot of talking, to convince people. If we do not succeed, we must ultimately suspend a particular form of cooperation or involve private channels or civil society. We cannot be obliged to cooperate with a country that manages its own resources badly. But I doubt whether we can oblige a country to do this or that.

79To have the Chinese on board and to do something together, we certainly must not try to impose conditions, especially not political conditions. We cannot think that the Chinese are going to play ball with us on human rights or democracy. That is totally inconceivable. On the other hand, we can imagine that they will agree with us on a concept of good management and desire for development. That is a concept that I would try to discuss if I were still working. I think that we must try to put an end to a competition that could become really unproductive, where we have the impression that if we try to hold the least discussion on a sensitive issue, good management or the choice of priorities, human rights or democracy, the partner countries can say: “We’ll try the Chinese, they do not ask so many awkward questions”. We really need to find common ground here, but let us stay at a level where we can hope that the Chinese are ready to work with us, and avoid areas where they are not at ease with the new order.

80Bernard Petit
Three brief comments. The first is that the debate has lately centred on the role of the European Commission as a donor. Of course, it is a major donor, $ 10 billion or € 9 billion a year, that is a huge amount. It is one of the biggest donors in the world, but I think that Europe’s main role is not that. Its main role is to use its power of initiative under the treaty, and its ability to initiate policy. To initiate policy in order to create a federation of Member States, but in the right way. Not to take away power. A federation of Member States around common goals and visions. The best example that I have of that is the Accra meeting on aid effectiveness following the Paris Declaration. On the proposal of the Commission, the Europeans adopted a very ambitious position for Accra and defended it to the last day, the last night, even reopening the document which you had all approved. That is the Commission’s main role, to initiate policy. Of course, to do that the Commission should be a centre of excellence for global and sectoral policies, and I fear that it is no longer always the case today, with a number of restructurings that have taken place. It is always difficult for an old hand to criticise the new generation, so I don’t want to criticise.

81Second point: I shall be very brief, because I agree entirely with Dieter on political conditionality. There is a fundamental difference between political conditionality and political dialogue. Cotonou has already introduced some important innovations concerning political dialogue, but dialogue is not the same as sanctions. Conditionality implies sanctions. Dialogue implies mutual commitments, and an entire procedure defined in Cotonou, involving consultation and discussion before cooperation is perhaps suspended. I would add that there is nevertheless a negative correlation between the concept of conditionality and the Accra or Paris principles that everyone is so keen on, concerning alignment and ownership. How can a country own its development policy, as is said in the Paris or Accra declaration, if the donors impose a number of conditions on its economic policy which naturally influence the country’s strategy? If we are serious, we must stop talking about ownership. That is a different debate. I would rather replace this concept of economic policy conditionality decided in advance with a conditionality based on results, and that is what the Commission tried to do with its MDG Contract concept. The Commission spent € 1.8 billion on this in about ten countries. The concept involved telling a country: “you will have a minimum amount of budgetary aid every year for six years, and beyond that minimum, the aid will be adjusted according to the results achieved on the basis of indicators that we are going to decide jointly.”

82A final comment on the division of labour and aid effectiveness. I think that there is a huge gulf between rhetoric and action. The Paris or Accra rhetoric is relevant. The European code of conduct on the division of labour is relevant, but it is not what happens on the ground. I shall just give you one example that has always struck me. In Kenya, eighteen months ago there were twenty donors rushing to buy medicines. They bought them through thirteen different central buying offices, and not the Kenyan one. That is aid effectiveness! In fact, I feel that we have embarked on a process of making aid into a technocratic routine. Bureaucracy has won the day, leaving no room for political inspiration. I feel that the world is changing unbelievably fast, that the private sector, the various players are adapting equally fast to that change, and that in contrast, in the case of development aid, it is business as usual.

83Sylviane Guillaumont Jeanneney
We have come to the end. It remains for me to thank all the members of the panel, because I think that it has been very interesting, and I thank them for trying to answer some of my questions.