The European Union and its member countries are by far the largest providers of development funds in the world, giving more than 55% of global official development assistance. Whereas, in the beginning, it was limited only to Associated Countries and Territories, the common development policy now covers almost all the underdeveloped countries of the world. Moreover, the contribution of the EU to the development of countries in Africa, Asia and Latin America is not limited to grants, through the Union budget, and loans through the European Investment Bank. An important part of its development aid takes the form of trade concessions both to ACP and OCT countries, through duty free imports of their products, and to Asian and Latin American countries, through the generalised system of trade preferences. In addition, the European development aid policy strives - without much success up to now - to support democratic regimes, human rights, women’s position and environmental protection in the recipient countries [see section 24.1].
While much clearly remains to be done, given an international backdrop of economic crisis in the developing countries and the fratricidal conflicts and political instability in many of them, the association agreements of the EU with ACP and OCT countries and its cooperation agreements with Asian and Latin American countries are a remarkable contribution to solidarity between the North and South of the planet. Although aid cannot make up for a lack of sound domestic policies or trade outlets, it may be used as a lever for the implementation of economic and political reforms. What is therefore needed is an approach which encourages internal reforms in the developing countries, on the basis of the four main themes expounded in the Treaty on European Union: consolidation and development of democracy, sustainable economic and social development, integration into the world economy and a battle against poverty. The adverse effects of climate change being particularly serious for the least advanced countries, the environmental dimension should be an integral part of the European Union's development policy, the principal objective being to create as many synergies as possible between action to combat poverty and that to tackle climate change.
By improving the arrangements for mobilising EU relief, the European Office for Humanitarian Aid (ECHO) is meant to provide both an efficient service to needy countries and a higher profile to European humanitarian interventions [see section 24.7]. It should give, indeed, public opinion tangible evidence of the Union's role as an active contributor in the field of humanitarian aid. EU citizens are entitled to know that they, through the Union budget, make a small contribution to the alleviation of the sufferings of the people of developing countries that the media relate every day.
In the future, the EU should ensure consistency between development cooperation, the common commercial policy and the common foreign and security policy, while establishing close relations with the partner countries. Greater coordination of development aid is needed both at the European Union level and worldwide. Internal coordination between the Commission and Member States would enhance the Union's overall effort and increase the effectiveness of this effort. A local EU action plan for coordination and harmonisation should exist in any partner country where two or more EU donors have a cooperation programme. Food security policy should go hand in hand with poverty reduction in the most vulnerable countries and its objectives and instruments should be fully integrated into the EU's overall development policy.
On the global scene, the enlarged Union will become the world's biggest economy. Its ability to influence global economic governance will accordingly be greater. As agreed at the Johannesburg World Summit on Sustainable Development in September 2002, the Union must defend a strategy for sustainable development based on the United Nations system and the international financial institutions and reject hegemony or unilateralism. To this end, it should promote the social dimension of globalisation, including bilateral and regional relations, development and external cooperation, trade policy, private initiatives and governance at global level. In view of the role they play in international development, the EU and its Member States should take the lead in revitalising the United Nations and its specialised organisations, the International Monetary Fund (IMF) and the World Bank in order to make them more effective in addressing the causes of hunger and poverty in the world, such as lack of peace, security and stability.
As emphasized by the EU at the Johannesburg World Summit on Sustainable Development (26 August to 4 September 2002), several challenges need to be addressed in relation to the economic, social and financial dimensions of sustainable development, such as making globalisation work for all and strengthening governance at international level. On sustainable development in a globalised world, the EU called for a reform of the international financial system to combat abuses of globalisation and for strengthening the role of international financial institutions in order to reduce the risks posed by financial globalisation for the poor countries.
While good governance is indirectly one of the priority areas of development policy, the European Union has not yet devised a general framework in this field. To promote human rights and democratisation in third countries, the common development policy should entail the signing, ratification and application of basic treaties and agreements on human rights by all third countries wishing to maintain political, economic, commercial or any other type of relations with the European Union. In addition, the Union should suspend any aid to regimes in third countries violating human rights or supporting terrorism. On the other hand, the EU should better define its sustainable development strategy, promoting sustainable patterns of consumption and production, conservation and sustainable management of natural resources. To ensure consistency in the Union's actions in this field it is vital to abolish the common foreign and security policy's requirement for unanimity concerning political decisions regarding developing countries [see section 8.2.2].