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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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: 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.
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
Conict, Security, and Development, World DevelopmentReport, (The World Bank: Washington, DC), April 2011, p.
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.”
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.
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.
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
“Fact Sheet: U.S. Global Development Policy,” The White House, September 22, 2010,
p. 2.
“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.
“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.
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.
Tereore, therenewed U.S.-EU Development Dialogue provides a orum
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.
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.
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.
Te PPD andQDDR explicitly adopt aid eectiveness principles, as dothe primary Obama Administration development initiatives
“U.S.-EU Summit Joint Statement,” Lisbon, November 20, 2010, p. 3.
o Feed the Future; Global Climate Change; and the GlobalHealth Initiative.
Te second HLCGD meeting on June 13,2011, approved a joint work plan on donor division o labor,aid transparency, and accountability.
 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.
“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.
“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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