Mobilization of Resources for Co-operative Development Aid (1994) - Part 2

Part 2 of  Mobilization of Resources for Co-operative Development Aid (1994)

4.4  External mobilization - the European Union

As previously defined, the external resources for development
aid are those which are mobilized from governments and
international donors. These donors are so different in so many
aspects, that it is not possible, nor considered necessary, to
make a presentation of them in this report.

Of interest to us however, is the fact that, within most of
these donors organizations, there has been a growing awareness
of the important role being played by the civic society in the
Third World. Governments alone cannot be responsible for all
development aspects in the society. This has led to an
increased recognition of the importance of the NGOs in the
South, and their need for support from their counterparts in
the North. As a consequence, the NGOs have, in various
manners, been allocated an increasing part of the official aid

Of greatest interest for the European co-operatives and their
aid agencies are the government  donors and the European
Union, which have specific votes for co-financing the NGO
development aid. The UN system, including the World Bank and
the regional banks, not having this facility, will have to be
approached in a different manner. And, according to our
proposal, ICE should here assume a leading role. We can for
obvious reasons leave the government donors aside, these are
best known by the individual CAA, and here concentrate on the
possibilities offered by the EU.

4.4.1     The European Union:

The volume of development aid provided by the EU is by any
standard large. In 1991 the total volume of EU aid amounted to
USD 3,8 billion distributed among more than 100 countries.
This aid represents approximately six percent of the total
expenditures of the EU.

The main beneficiaries are the countries in sub-Saharan
Africa, which in 1991 received 58 percent of the EU aid,
followed by Southern Asia and Latin America, these two regions
received about 10 percent each.

More than half of the aid (56 percent in 1991) is for long
term development projects, primarily for the rural areas,
while food aid amounted to some 21 percent during the same
period. Other large components are support through the NGOs,
emergency relief and assistance to refugees and displaced

4.4.2     The EU support to NGOs in 1993:

The NGO sector is receiving an increasing part of the EU aid,
in 1993 no less than ECU 702 million was distributed through
the NGOs collaborating with the EU. This represents an
increase of 46 percent of the NGO allocation two years
earlier. These figures confirm the importance the EU is
attaching to the work of NGOs.

Emergency relief and food aid are the two dominant types of
aid provided by the NGOs with contributions from the EU. These
two sectors accounted for almost 53 percent, or ECU 369
million, of the total NGO contributions by the EU in 1993. Of
the total EU emergency relief aid in 1993, the NGOs
distributed 44 percent. The EU considers the work of the NGO
in this field to be of great value, and it is the intention to
further stimulate and develop this collaboration. The votes of
emergency relief and food aid do not require any financial
contributions by the NGOs. 

The third largest NGO allocation made by EU in 1993 was for
small-scale development projects, amounting to ECU 121
million, or 17 percent of the total. This vote presupposes
co-financing, since EU is prepared to cover only 50 percent of
the project cost. It is also the most obvious vote for
co-financing of co-operative development projects. We will
therefore need to be observant on the fact that total
applications from NGOs for funding from this vote amounted to
ECU 215 million last year. This means that the EU was able to
approve only 56 percent of the NGOs requirements on this
particular vote.

Other important NGO votes provided funding for victims of
apartheid (ECU 90 million), refugees and displaced persons
(ECU 40 million) and the NGO assistance to the West Bank and
Gaza strip (ECU 35 million). The balance in 1993 was made up
of support to public information campaigns in Europe,
combatting drugs and assistance earmarked for certain
countries; Vietnam, Cambodia and the frontline states in
Africa. The firm impression of the NGO development work
supported by EU in 1993 is that efforts and activities aiming
at long term development and growth are in a clear minority,
possibly as low as a quarter of the total.

4.4.3     Funding opportunities for NGOs within the EU:

The brief account above of the EU support to the NGOs in 1993
clearly indicate that, not only are substantial funds
available to NGOs within the EU system, but there is also a
very wide range of activities which are supported. This is 
confirmed by the great number of votes (budget lines in the EU
language) to which NGOs have access.

According to the EU aid budget for 1994, NGOs may have access
to no less than approximately 50 different votes. These votes
are, with a few exceptions, earmarked for very specific
purposes or regions/countries and seem to cover all types of
needs for development aid.

The votes are too numerous to list here, but they can be
arranged under the following main headings; Economic and
Social Rehabilitation; Food Aid; Refugees and Emergency
Humanitarian Aid; Democracy and Human Rights; Migrants and
Racism; Environment; Health; Women; Drugs; and 13 Specific
Countries/ Regions. To this should be added the two votes for
unspecified purpose:

1)   NGO Development Projects, combined with Information
     Campaigns in Europe, and 
2)   Decentralized Cooperation. The former of these two is the
     "ordinary" NGO vote requiring co-financing by the NGO,
     mentioned above, and has an allocation of ECU 145,
     million in 1994. The latter is a new facility under the
     Lom' convention and other cooperation agreements with
     non-Lom countries, and is financed out of the official EU
     and budget at the disposal of each individual country,
     and there are no absolute requirements on NGO
     contributions to the project costs.

Adding together the 1994 allocations of the above votes, we
reach the impressive amount of more than ECU 1, 1 billion. It
should however be underlined that this would be the total
amount NGO may have access to, which do}s not necessarily mean
that NGO projects will qualify for the full amount.

We shall conclude this section by making a few observations.
As can be seen above, most of the funds available for NGOs are
designated for particular purposes and countries/regions. In
1993 less than 20 percent of funds allocated were for
unspecified activities. Ostensibly the EU is very much
determining which development needs to address in the Third
World, giving the NGOs limited leeway in this respect.

Going through the purposes and the activities the votes for
1994 are to support, it seems as if the funding options of
relevance to ordinary co-operative institution building
programmes are limited. The above mentioned impression of long
term human and institutional development support being very
much in minority is confirmed by the budget for 1994.
Agriculture, being the backbone in many economies and
particularly in Africa, is for instance not even mentioned. 

It is on the other hand conceivable that a number of co-
operative development programme would qualify for support
under a number of votes e.g. the vote for social and economic
rehabilitation, women, training and the country specify
appropriations. The above mentioned budget line of
decentralized cooperation would also seem as a good
possibility for supporting co-operative programmes. This is
however very difficult to ascertain without closer contact and
dialogue with the EU. We will return to this in the following

4.5  The European Union and the co-operatives

4.5.1     Prerequisites for funding:

Of the 15 Co-operative Aid Agencies in Europe 12 are within
the EU. These organizations have different origins and their
work programmes vary considerably, some of them put emphasis
on resource mobilization for own development programmes, while
others function more as development consultancy firms. Their
development work in Africa is not comprehensive and there is a
limited amount of exchange of experience between them. Some of
them have a very limited contact with ICA. They also vary
considerably in size and resources. Few of them have
established contacts with the EU and the NGO networks lobbying
with the Commission.

What is here proposed are certain coordination efforts though
ICA, which are intended to put co-operatives on the map of EU,
increase the prospects of the CAAs to obtain funding from EU
and thus enable them to provide additional co-operative
development aid to Africa. More concerted efforts of these
organizations should also enrich the collective efforts
through the diversity and the variety of knowledge and
experience the organizations are able to bring into the joint

As we have shown in the first chapters of this report, the
co-operative scenario of today is very much different from the
one of yesterday. Previous development policies and methods
are not relevant today. Co-operative donors will have to
adjust their strategies and modes of support. We believe that
national and international donors will increasingly require
co-operative development policies and donor strategies, which
take the new situation into account, as prerequisites for
funding of co-operative support programmes. We believe it is
of greatest importance to recognize this. The fact that one of
the most obvious EU votes for co-operative programmes was
heavily over subscribed in 1993, makes this point even more

It is therefore essential that the African and European
cooperators, the latter represented by the CAAs, have a common
perception of the:

a)   situation the African co-operatives are facing today,

b)   basic strategies to be pursued by the African cooperators
     and the revised role of co-operative development

We are not talking about an absolute streamlining, there are
local and regional variations and some donors may look upon
their role different from what we have proposed in this
report. But, as we have tried to show, there are a sufficient
number of common denominators in many African countries
justifying a common description of the situation in general
and a common perception of the remedies to apply. And, again,
this will prove to be the most convincing arguments for
mobilizing external resources.

The first step is now to shift the debate on these issues to
Africa so as to obtain the inputs of the African cooperators
on these issues. We have in this report endeavoured to secure
the opinions and perceptions of the African cooperators. But
there are still considerable limitations in this respect. It
is therefore recommended, that ICA, as a first measure,
consults the African cooperators, particularly with regard to
our description and analysis of the current situation and the
strategy on co-operative development in the near future, with
a view to ensuring that their views are fully reflected in
future documents before EU and other donors are approached.

Similarly, it is recommended that ICA consults the CAAs on
these questions, particularly with regard to our proposed co-
operative donor strategy, so as to have this discussed,
amended and agreed upon.

With these two exercises completed, it would be possible to
approach the EU and claim, with full justification, that the
African and European cooperators have a common understanding
of the current situation and that they in principle agree on
the measures to be taken. 

It goes without saying that the development perspective and
donor strategy will be adjusted to each specific situation,
when applying for funding for a specific project. But the
basics will remain the same.

4.5.2     Contacts with EU:

Co-operatives do not have well established links with the EU
and do not participate in the approximately 30 Development NGO
networks, which are lobbying on a wide range of interests with
the organization. EU present funding of co-operative
development aid is very limited, and there are, as far as can
be ascertained, only two co-operative NGOs which make use of
the EU funding possibilities.

Considering the magnitude of the co-operatives in the Third
World and their importance, it is no exaggeration to state
that the interests of the cooperators in Africa and elsewhere
in the Third World are grossly under-represented in the EU and
the NGO networks.

The European CAAs are not large organizations, compared to
many other development NGOs, they are in fact rather small. If
we on the other hand look upon them as representing the
interests of the co-operatives of the Third World, which need
development assistance, the picture is different. But despite
this, it might be difficult to influence the EU and the
networks when your own organization is small, and particularly
if you are rather new in the game. 

We should also be aware of the fact that there are more than
1.000 NGOs listed as having contacts with the EU, of which
about 670 receive support. There is consequently a great
number of interests represented by the NGOs, competing for the
EU resources. We would like to draw the following conclusions
from these observations.

ICA, being the global co-operative organization, will have to
take a lead and play a very active role in the contacts with
the EU. In order to pave the way for the co-operatives into
EU, it is therefore recommended that ICA opens up a high level
dialogue with the EU. 

This would aim at creating a better general understanding of
the co-operatives in the Third World, their role in the
national economy and the democratization process, the present
position of the co-operatives in Africa as well as their needs
for development assistance. 

If our impression that funding of programmes for long term and
sustained development efforts is at a disadvantage, as
compared to emergency aid and similar types of assistance, ICA
has a very important lobbying role to play.

There are approximately 30 NGO networks, affiliated to the
"Liaison Committee of Development NGOs to the European
Communities" (LC). They represent a wide range of interests;
trade, food aid, children, religious, environment, women,
medical, youth etc. 

Although the co-operatives in the Third World and development
assistance to them is of such importance that one might argue
that it is justified to establish a network on their own, the
first logical step would be to join one of the existing NGO

ICA is in the best position to do the preparatory work, and it
is therefore recommended that ICA investigates the NGO network
system and their lobbying priorities, so as to be able to
establish which networks are suitable for ICA and interested
CAAs to join.

As has been indicated previously, the number of funding
options within EU for NGOs is great. Some of them will
obviously be of relevance to the CAAs, but this is difficult
to establish by only reading the various presentations of
these options, since practice and routine may differ. The
rules for NGO participation  also differ between the different
budget lines.

In order to assist the CAAs on this issue, it is recommended
that ICA compiles a small guide on the various votes of
relevance for co-operative development aid, rules and
regulations governing the various funding options as well as
application procedures and practices, etc.