Opinion: Mr. Javier Raya Aguado

Interview to Javier Raya Aguado, Deputy Head of Unit (Contracts and Finances) of the DG Latin America & Caribbean of DEVCO

June 21, 2017

Javier Raya Aguado is Deputy Head of Unit (Contracts and Finances) of the DG Latin America & Caribbean of DEVCO. In the last years, he has been in charge of developing DEVCO new legal instruments to implement the development cooperation aid of the European Union. Among the new instruments emerging in this context, we can find Blending, delegation of UE funds to international organization, Delegated Cooperation to Members States’ Agencies or the new Trust Funds.

EuropeAid has published its 2016 report, analyzing the main trends and results of External Aid in 2015. Could you please explain us what are the latest developments in this area?

The latest developments in External Aid are related to the main political events, such as 2030 Agenda, the SDGs[1], Addis Ababa’s agenda, the COP21… that all took place in 2015. These important events are determining the current priorities of the European Union, together with the current affairs such as the Syrian crisis or the situation in Africa, which has created a flow of massive displacements, whose impact became quite worrying in 2015. These events have a negative impact on development and the Commission’s action is focused on finding solutions to those problems.

In this context, a Trust Fund for Africa has been created, with the aim to create opportunities and to develop a viable economy in the continent, in order to fight the migration’s causes. Other priorities of the European Union are gender equality, promotion of youth, climate change, sustainable energy, sustainable and inclusive investments and growths, as well as mobility and migration. To answer to this last point, new financial instruments are being created, based on public-private collaboration and between countries. In this sense, a Foreign Expenditure Plan has been launched, and announced by the President of the Commission, and the generalization of Blending, together with the most traditional modalities that still exist.

With reference to the new financial instruments that are being developed to carry out the external aid, could you please detail them briefly and tell us to what extent they are innovative?

One of the most innovative instruments is Blending, a solution aimed to attract additional financing greater than the initial European grant: the grant has a leverage effect encouraging the loan.

This mechanism is giving good results and for this reason, investments facilities by regions have been created (for example LAIF[2] in Latin America or CIF[3] in the Caribbean area). There is a dialogue between the different actors: the European Union, the Member States and the financial institutions that lead and manage the proposals. It is one of the newest developments that will be joined by the Foreign Investment Plan, a stronger Blending mechanism which supposes a better coordination between Investment Facilities, more technical support in the phase of projects’ preparation and for a greater dialogue with the economical and public agents to create more investment opportunities, as well as a guarantee to foster private companies’ investment with a European endorsement. It is mainly focused on Africa, but could be extended to other regions in the future.

Other new instrument: the Trust Funds. Four trust funds are currently existing, one for the Central African Republic, another one for the crisis in Syria, another one to tackle migration in Africa (with the participation of 26 countries) and the last one to support the peace process in Colombia. They are mechanisms that allow creating funds between member States and other donors, executing them in a faster way since they are managed through faster procedures than the ones applicable to the execution of projects directly funded by the European Union budget. They are really appropriated for cases of crisis; in addition they have demonstrated more permeability to initiatives coming from member States and allow managing the funds in a more collaborative way.

Focusing on Blending, how can we ensure its orientation to development?

They are two levels. A previous level, when time comes to analyze the proposal, we have to ensure that public sector creates investment in search of reducing poverty. In this sense, development goals are still the same (reduction of poverty, etc.), what changes is the modality. On the other hand, all the European Union projects are evaluated according to the target on which they were initially inspired and indicators exist to be used as criteria to act.

At a global level, the European Union has monitoring mechanisms (such as ROM) and a global monitoring of the Blending modality is expected. The court of auditors is also guarantor of the good management and we have internal audit mechanisms ensuring that the goals are fulfilled. It is not only about guaranteeing the economic management, but also to fulfill the development goals.

You have mentioned the SDGs and their influence in the definition of European policies. Concretely, could you please explain us how the implementation of the SDGs in the countries is being supported?

The European Union has been one of the main inspirers of the SDGs and participated actively to their definition, previously and during the elaboration process. For this reason, the European Commission is fully committed, and it is not only a political compromise but also a legal one, since the SGDs are integrated to the Development Cooperation Instrument, which has the same objectives. There is thus an obligation to follow them.

Furthermore, the Commission is very concerned by this issue and wants to show there are results. In this context, the results framework indicates in which way the Commission is participating and the report displays the detailed information with a breakdown by countries. In this sense, we really work on transparency.

One of the new modalities of External Aid is Delegated Cooperation relying on national agencies. To what extent is this new mechanism working?

Delegated Cooperation is a political compromise, oriented to ensure the coordination between donors to reach a common management, with the aim to identify which one is the most efficient agent in a concrete country and sector. In the European Union they are 29 development policies (from the 28 countries and from the Commission) and ensuring the coordination is one of the main principles of aid efficiency, in addition to be a particular obligation for the European Union.

The conclusion is that this formula has allowed facilitating the dialogue between member States and the European Union, which was unthinkable ten years ago. The underlying idea was to create truly European projects and some results are being reached. For example, in the Latin American and Caribbean region, we encourage the European agencies to work together,

It is now necessary to make a great analysis to see if this new formula has positive impacts on aid efficiency, see how cooperation is being managed among donors and develop a common system of monitoring.

In this context, how can we analyze the Spanish experience?

The experience with Spain is quite positive, even if it has arrived a bit late in Delegated Cooperation. It has been launched in 2008 and pioneering countries such as Germany or France have been more active since the beginning, while there was certain reluctance from Spain, maybe due to the important bureaucratic charge of this modality.

But in spite of this delay, Spain is now one of the main partners of the European Union for Delegated Cooperation (it occupies the 3rd position after Germany and France) with a relevant action in regions such as Latin America and Caribbean, but also with several progresses and presence in Sub-Saharan Africa, where are currently concentrated most of the European funds.

[1] Sustainable Development Goals fixed by the United Nations

[2] Latin American Investment Facility

[3] Caribbean Investment Facility

 Opinion: Mr. Javier Raya Aguado