Criteria for differentiation and methods for phasing out EU's development cooperation in light of the Commission's proposal for a development cooperation instrument (DCI) for 2014-2020

The European Union has expressed its intention to concentrate its development aid resources where they are needed the most. To this purpose, the Commission has proposed to apply national per capita income-based criteria for the identification of countries that may no longer qualify for EU bilateral aid under the Development Cooperation Instrument for the 2014-2020 Multiannual Financial Framework. With the new scenario, the EU aspires to end poverty reduction-focused aid allocations to highly heterogeneous 'graduated', middle-income countries that house large amounts of poor people. The present briefing assesses actual and alternative criteria against which the EU could better adapt to the changing global geography of poverty. Furthermore, it explores the prospected impacts that a potential cut of bilateral aid may entail for 'graduated' countries and for the Union itself. Given the risk of loosing bilateral aid focal points in developing countries and the non-development nature of the Partnership Instrument, a strategic adaptation period is proposed, during which a more comprehensive and coherent EU global development policy capable to impact the people most in need could be adopted. This should encompass a transition toward a stronger focus on social cohesion, arguably the Achilles' Heel of most middle-income countries, as they progress on their economic development.