Opinion: Mr. Claudio Salinas

Mr. Claudio Salinas, the person responsible for Budget Support in the Geographic Coordination for LA and the Caribbean Unit of EuropeAid, gave an interview to Eptisa’s Development Cooperation department

July 25 2012

Mr. Salinas answered some questions related to Budget Support and, more specifically, to the change in the approach of EU’s Budget Support arising from its Consultation from late 2010, as well as aspects on which the EU should place emphasis in order to improve the aid impact through BS and the role consultancy firms must play in this change process.

1

Main aspects of the change in the approach of EU’s Budget Support

The main aspects of the change in the approach of the Budget Support (BS), within the framework of the adaptation process to the realities of the European Commission’s new development policy — as reflected in the “Agenda for Change” communication — are, first and foremost, the build-up and better structuring of the implementation of BS, strengthening the focus on results, which is a vote for the continuity of this modality, after the doubts expressed by the Commissioner about its effectiveness, reinforcing this new approach as the preferable method, as well as the introduction of a new eligibility criterion — the budget transparency of recipient countries. Secondly, attention should be drawn to the inclusion in the already existing General Budget Support and Sectoral Budget Support, which are now respectively called Good Governance and Development Contracts and Sector Reform Contracts, as well as a new variety, the so-called State Building Contract, which will allow to give a better answer to specific questions in weak countries. At the same time, greater account will be taken of the specificities of isolated countries and overseas territories, and help will be provided to give a better answer to the needs and realities of these micro-economies. Finally, I would highlight the introduction of political aspects and, explicitly, democracy and Human Right principles.

Another additional element included in the new approach is the creation of regional teams to assist EU Delegations in the implementation of BS.

2

Which aspects should be developed by the EU in order to improve the aid impact through BS

One of the criticisms leveled against BS is its lack of clear targets. In this sense, more work will be done on the definition of annually expected targets, which will allow that the aid impact through BS is better defined.

Secondly, the requirements for BS implementation will change. In this sense, the EU’s internal decision when doing a BS will be worked on more thoroughly ex ante. For example, it will not be possible to do a BS if its target is to develop a sectoral policy, as it has been the case several times so far. That sectoral policy will need to be developed beforehand, and the BS will be designed to support it.

Thirdly, more emphasis will be placed on the area of indicators and statistical systems and on its reliability in order to have a clear picture of what is being achieved.

Another important aspect in which the EU has been successful when implementing budget support in the Latin America region has been the support to systems of citizen oversight, as well as to control bodies. More work will be done in that area.

Finally, more attention will be paid to the structure and perspective of the budget for investments in recipient countries. In the case of Latin America, it is essential to carry out an analysis of that budget.

3

What aspects should be emphasized by a consultancy firm such as Eptisa, which participates in the service provision of TA to BS in order to improve the contribution to the development of BS and the achievement of its objectives

There is no doubt that the TA to BS cannot cease to exist. The tendency is that the TA should increasingly focus on areas of public finance management, which is why the positioning of consultancy firms in areas such as reform plans for public finance management, middle-term budgets, and result-oriented management is a safe bet.

Another key point — which might appear in future programs — is the exchange of expertise, twining accompanied by backstopping, for example in comptrolling questions, both at a South-South and a North-South level (Europe — South and Central America). This aspect has not been defined yet, but it is very demanded.


 
 Opinion: Mr. Claudio Salinas