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The U.S.-EU High Level Development Dialogue: Building on the Legacy of the Marshall Plan

The U.S.-EU High Level Development Dialogue: Building on the Legacy of the Marshall Plan

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This policy brief reviews the opportunities and challenges for U.S.-EU development cooperation in key sectors in aid effectiveness.
This policy brief reviews the opportunities and challenges for U.S.-EU development cooperation in key sectors in aid effectiveness.

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Published by: German Marshall Fund of the United States on Jun 24, 2011
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06/28/2011

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Summary
: In a rapidly chang-ing world, the European Union(EU), including its 27 memberstates, is one of the UnitedStates’ most important multilat-eral partners for achieving U.S.global development objectives.The aid programs of the 27 EUmember states combined with the Commission and the U.S. aidbudgets disburse more than 70
percent of global ofcial devel
-opment assistance. Therefore, the renewed U.S.-EU Develop-ment Dialogue provides a forum through which the United Statesand the EU (including memberstates) can maximize resultsfrom limited foreign assistanceresources. A robust and resilientU.S.-EU development partnership
would reect the best aspects of 
U.S.-European partnership since the Marshall Plan. At present, the three main areas for expandedU.S.-EU cooperation are prioritysectors, such as food security;improved aid effectiveness andcountry ownership; and newemphases, such as security anddevelopment and joint support of new Middle Eastern democracies.This brief reviews the opportuni- ties and challenges for U.S.-EUdevelopment cooperation in keysectors in aid effectiveness andin newer areas such as securityand development suggests anumber of ways to move forward.
Economic Policy Program
Policy Brie 
I. Current Development Trendsand Challenges
Over the last three years (2008-10), theworld has seen a major disruption inprogress on development and poverty reduction, rom which recovery,especially in the developed world, isstill in its early stages. One o the maineects o the economic and nancialcrisis has been the shi in many devel-oped countries toward scal austerity.Tese moves to reduce the growth o public spending have slowed plannedincreases in development assistanceand hindered progress toward meetingthe Millennium Development Goals(MDGs) by the 2015 target date. At thesame time, a number o emerging aiddonors – such as India, China, Brazil,and others – have become largerplayers in high-level internationalmeetings (such as the G20 and theUnited Nations Framework Conven-tion on Climate Change ) and in assis-tance eorts.In spite o these global economicchallenges, the developing world’seconomic growth rates – in China,India, Arica, and other regions – haverebounded aster than growth in thedeveloped world. More attention has
The U.S.-EU High Level DevelopmentDialogue: Building on the Legacy ofthe Marshall Plan
by G. William Anderson
Aid & Development June 24, 2011
1744 R Street NWWashington, DC 20009T 1 202 683 2650F 1 202 265 1662E ino@gmus.org
been paid to the links among security,conict, and development. In orderto prevent conict and violence, theWorld Bank’s World DevelopmentReport (WDR) emphasizes helpingragile states to 1) build legitimateand capable institutions, 2) providedemocratic governance, and 3) restorepublic condence to prevent new orresumed conict and violence.
1
Other challenges currently acing theworld community include climatechange, ood security, improvingnational health systems, genderinequality, and choosing the bestresponse to the popular uprisings inthe Middle East and North Aricathat could dramatically change theeconomic and political systems o many countries in the Arab world.International reaction to these prob-lems has included the UN-sponsoredHigh Level Meeting on the MDGs inSeptember o 2010 and similar high-level conerences on climate change,ood security, global health, and otherissues. Nonstate actors, such as NGOs,oundations, and the private sector, as
1
Conict, Security, and Development, World DevelopmentReport, (The World Bank: Washington, DC), April 2011, p.
12-13.
 
2
Economic Policy Program
Policy Brie 
well as traditional aid donors, have contributed to discus-sions in all these international orums.Major bilateral aid donors, such as the United States, theUnited Kingdom, Germany, and the Netherlands, andmultilateral organizations like the European Union (EU)have re-oriented their oreign assistance approaches. TeUnited States has issued a new National Security Strategy (2010), its rst Presidential Policy Directive on GlobalDevelopment (PPD), and rst Quadrennial Diplomacy andDevelopment Review (QDDR). All emphasize the impor-tance o “broad-based economic growth and democraticgovernance,” sustainable social services (especially educa-tion and health), and “game-changing innovations with thepotential to solve long-standing development challenges.Te PPD states that “the United States cannot do all things,do them well, and do them everywhere. Instead, the UnitedStates must ocus its eorts in order to maximize long-termimpact.”
2
In the context o the EU Lisbon reaty implementationand preparations or its next multi-annual nancial rame-work or 2014-2020, the EU has examined where and howit should allocate its uture development assistance.
3
As aresult o the U.K.’s recent review o its bilateral and multi-lateral assistance, that country has conrmed its commit-ment to allocate 0.7 percent o its gross national incometo development assistance by 2013 and made decisions toallocate almost one-third o its aid to ragile states, termi-nate its development assistance to 16 countries, and ocusmost o its oreign aid on 27 countries in Arica, Asia, andthe Middle East.
4
It will prioritize investments in ood, cleandrinking water, basic healthcare, and education. Te Dutchgovernment intends to reduce the number o its partnercountries rom 33 to 16 while concentrating on oodsecurity, water, security, and the rule o law in ragile statesas well as sexual and reproductive health rights. Tere isalignment o policy priorities between the United States andEurope in key areas like ood security and also an overlap
2
“Fact Sheet: U.S. Global Development Policy,” The White House, September 22, 2010,
p. 2.
3
“EU development policy in support of inclusive growth and sustainable development:Increasing the impact of EU development policy,” European Commission Green Paper,
Brussels, October 11, 2010. “Public Consultation: What funding for EU external actionafter 2013?” European Commission, Brussels, October 2010.
4
“U.K. aid: Changing lives, delivering results,” Department of International Development(DFID), 2011, p. 3.
in eorts to become more ocused on key countries andsectors.In this uid development assistance context, the upcoming2011 High Level Forum on Aid Eectiveness in Busan,South Korea, oers an opportunity to move toward a morecomprehensive global development partnership, includingChina and other emerging donors, and to devise morerobust multilateral approaches or preventing conicts andcrises in ragile states.
5
What is the U.S.-EU Development Dialogue and why is it important? 
In November 2009, the EU and the United Statesrelaunched a ormal U.S.-EU Development Dialogue at theU.S.-EU Summit in Washington, DC. As the two largestproviders o Ofcial Development Assistance (ODA), theUnited States and Europe have substantial inuence whenthey act together in international development orums andon the ground in developing countries.Te aid programs o the 27 EU member states combinedwith the Commission and the U.S. aid budgets disbursemore than 70 percent o global ODA.
6
Tereore, therenewed U.S.-EU Development Dialogue provides a orum
5
Homi Kharas and Noam Unger, “A Serious Approach to Development: Toward Success at the High Level Forum on Aid Effectiveness in Busan, Korea,” Policy Paper 2011-02, (TheBrookings Institution: Washington, DC), pp. 4, 6.
6
The United States, EU member states, and the Commission provided $116 billion out of a total global ODA of $165 billion in 2009. See DAC Statistical Table 2a, Total Global ODANet Disbursements, 2001-09.
There is alignment of policypriorities between the UnitedStates and Europe in key areaslike food security and also anoverlap in efforts to become morefocused on key countries andsectors.
 
3
Economic Policy Program
Policy Brie 
through which the United States and the EU (includingmember states) can maximize results rom limited oreignassistance resources. Given the scal constraints aectingboth sides o the Atlantic, a robust U.S.-EU developmentpartnership (including EU member states) could spur bothstrategic and eld-level collaboration. Tis would comple-ment other mechanisms or cooperation and contributesubstantially to accelerating inclusive growth, reducingpoverty, improving people’s lives, providing security andstability, supporting the rule o law, and preventing conictand crisis.A robust and resilient U.S.-EU development partnershipwould reect the best aspects o U.S.-European partnershipsince the Marshall Plan, which helped provide security to aEurope devastated by World War II and begin the process o European integration.
II. What are the Key Areas forExpanded U.S.-EU Collaboration?
At present, the three main areas or expanded U.S.-EUcooperation are priority sectors, such as ood security;improved aid eectiveness and country ownership; andnew emphases, such as security and development and jointsupport o new Middle Eastern democracies.
Sectoral ocus areas.
From its beginning in 2009, therelaunched U.S.-EU Development Dialogue highlightedthree priority areas: agriculture and ood security, climatechange, and the MDGs. Aer the September 2010 UNMDG Summit, the ocus under the MDG area shied toglobal health. As o April 5, 2011, the areas o ood secu-rity, climate change, and health enjoy road maps managedby joint U.S.-EU technical working groups. Moreover, U.S.and EU eld delegations received joint U.S.-EU guidanceon increased cooperation aer the rst meeting o the HighLevel Consultative Group on Development (HLCGD) inApril 2010.
Improved aid eectiveness.
In the area o aid eectiveness,both the EU and the United States have increased theirocus on country ownership, division o labor amongdonors, transparency, and accountability.
7
Te PPD andQDDR explicitly adopt aid eectiveness principles, as dothe primary Obama Administration development initiatives
7
“U.S.-EU Summit Joint Statement,” Lisbon, November 20, 2010, p. 3.
o Feed the Future; Global Climate Change; and the GlobalHealth Initiative.
8
Te second HLCGD meeting on June 13,2011, approved a joint work plan on donor division o labor,aid transparency, and accountability.
9
 One important question that aects the level o expandedU.S.-EU cooperation in the eld (including EU memberstate development assistance) is the pace at which theUnited States can move toward greater exibility in aidimplementation mechanisms that disburse aid throughcountry public nancial management (PFM) and othersystems. In Pakistan and Aghanistan, a signicant propor-tion o U.S. assistance already moves through countrsystems. In other parts o the world, progress in usingcountry systems has moved more slowly, although U.S.Agency or International Development (USAID) is devel-oping both guidance and sta training or greater useo country systems to disburse long-term developmentresources.
8
“Fact Sheet: U.S. Global Development Policy,” The White House, September 22, 2010,pp. 3-4. “Leading Through Civilian Power,” The First Quadrennial Diplomacy and Develop
-ment Review, 2010, p. 110.
9
“Joint Statement on the European Union -- United States Development Dialogue,” USAID,
June 16, 2011.
One important question that
affects the level of expanded
U.S.-EU cooperation in the eld
is the pace at which the UnitedStates can move toward greater
exibility in aid implementation
mechanisms that disburse aid
 through country public nancial
management and other systems.

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