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PCD Definition

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PCD Definition

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  1. The Future of the European Union’s Development Cooperation StrategyPutting “Policy Coherence” at the centre of the agendaProf. Louka T. KatseliState M.P. - Hellenic Parliament Briefing Session for ParliamentariansImplementation of the European Consensus on Development: 2007 Policy Coherence for Development Rhetoric or Reality?Brussels, 26th November 2007

  2. PCD Definition The pursuit of development objectives through the systematic promotion of mutually- reinforcing policy actions on the part of both OECD and developing countries.

  3. PCD Promotion at several levels: • Internal Coherence • Intra-Country Coherence • Inter-Donor Coherence • Donor-recipient Coherence

  4. In practice, the policy-coherence agenda seeks to... • Identify and address cases of incoherence • Create and strengthen institutional mechanisms that facilitate policy co-ordination • Provide incentives for the systematic promotion of mutually-reinforcing policies in rich and poor countries alike • Ensure credibility and predictability in national and international economic systems

  5. Trade Environment Climate Change Security Agriculture Fisheries Social Dimension of Globalisation, Employment and Decent Work 8. Migration 9. Research 10. Information Society 11. Transport 12. Energy The EU’s Commitment to Policy Coherence for Development

  6. Interrelations Among EU Policies with Development Impacts

  7. With whom does the EU trade? (2004)

  8. Europe’s Big Players in International Trade Flows Source: Eurostat

  9. Where does the EU invest? Source: Eurostat

  10. Migrants (Foreign-Born) in the EU, 2000 Source: OECD Database on the foreign-born and expatriates, 2005

  11. DAC Peer Review of the European Community 2007 (data 2004-5)

  12. The global allocation of aid is pro-poor, while FDI and export flows and migrant stocks are skewed toward middle-income countries. Source: Cogneau and Lambert (2005).

  13. Complements or Substitutes? • Aid compensatory for FDI and trade flows → diversification but fewer synergies • Trade- migration: complements rather than substitutes • Migration promotes trade • Trade enhances openness and hence facilitates migration • Trade- aid: aid affects trade composition and may promote trade capacity building • Trade- FDI: • important interlinkages increase complementarities • Coordinated FDI/ Trade liberalisation encourages cost- reducing FDI • Trade- migration- FDI: complements in regional integrated markets (e.g. SE Asia)

  14. “Coherence orphans” • If there are complementarities among aid, FDI, migration and trade flows, some countries benefit more than others from these mutually-reinforcing flows: EU candidate countries, CIS, MEDA, S. East Asia, SADC countries. • The ACP countries, though they might receive substantial amounts of aid, do not benefit from the full, complementary impact of FDI, export earnings from the EU • Though they may not be “aid orphans”, many countries are “coherence orphans”

  15. Conclusions I • Need for a more coherent and effective development cooperation policy which exploits full range of policy instruments • Migration policies should be integrated with trade and development cooperation policies • ODA: a powerful tool for productive restructuring and trade promotion through capacity building (e.g. infrastructure, energy, education)

  16. Conclusions II • Trade and ODA policies: case of incoherence especially in agriculture • Complementarities between FDI and trade driven by mutually reinforcing policies associated with positive development outcomes • Need to create institutional arrangement for policy coherence

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