The EU’s new emphasis on “human security” is designed to prevent development policy being swamped by terrorism concerns. But it could yet divert spending away from poverty alleviation into peace-keeping, warns Simon Maxwell, who heads the UK’s Overseas Development Institute. The good news, though, is that he also sees a new leadership opportunity for the EU in development policy

A significant shift is taking place in world affairs that offers the EU a new leadership opportunity in development policy. But, there are also risks involved, notably when it comes to the challenge of world poverty. The shift in question is rooted in changes to the global economy and the global agenda. These are moving the debate from national-level poverty reduction strategies to a new conversation about global policymaking for global problems.

Two years ago, when 2005 was the year of international development, world attention to the core poverty reduction agenda was at its highest, and was reflected in the Millennium Development Goals. But now the tide has turned, and has retreated far enough to reveal a number of the creatures that had been hiding beneath the sand. They include such demons as security and terrorism, climate change, threats of epidemics if not pandemics, and the impact of China and India on international trade.

In aid-dependent countries, the “20% Club“ where aid accounts for such a large share of GDP, the focus is still very much on aid-related issues like absorptive capacity and accountability. In less aid-dependent countries, the 0.2% Club, the newer issues dominate and also go hand-in-hand with demands for more equitable partnerships between developed and developing countries. A good example of this was when Prime Minister Tony Blair visited China in September 2005, during the UK’s EU Presidency. There were 23 items in the final communiqué, almost all of which could be considered as related to development, even though none had much to do with aid.

In this connection, White Papers were produced last year by two different UK ministries, the Foreign and Commonwealth Office and the Department for International Development (DFID), and both placed global threats and issues firmly on the agenda. The EU’s contribution has been the Commission’s Communication to the Council, published last June and called “Europe in the World”. It lists the main challenges, describes the EU’s external policy “assets” and looks at ways to achieve greater coherence, effectiveness and visibility.

There is no automatic connection between a list of global challenges and the reinforcement of multilateral institutions, counting the EU here as multilateral. In principle, nation states working together can tackle global problems. Even here, though, to deliver change they need institutions like the WTO or the meetings which underpin the Kyoto Protocol on climate change.

The mood is in any case swinging behind multilateral interventions. The recent report of the UN High-Level Panel on System Wide Coherence is set to give new impetus to the UN’s efforts, just as the report of the task force on global public goods will focus attention on new multilateral institutions. And this is what the British government’s recent White Paper on international development had to say on the topic: “Effective international organisations are needed now more than ever to balance competing national interests, and find solutions to problems that cannot be solved by individual countries alone. Only by working multilaterally will it be possible to: act when states fail to protect their people; enforce rules-based trade; tackle epidemics like AIDS or avian flu that threaten us all; and manage the climate, forests, fisheries and water that we all share. There is no alternative, without an effective international system, the world would be a more unequal, dangerous and divided place”.

This sounds like an opening for the EU, among others. Speaking in Brussels at the European Development Days last November, Hilary Benn, the UK Secretary of State for International Development, commented: “This is what the European Union was designed for; addressing global problems that require cooperation across borders”.

Where, then, are the risks? They mainly have to do with making sure that poverty concerns are not sidelined as policy evolves. The EU’s External Affairs Commissioner, Benita Ferrero-Waldner, recognised the new challenge and its attendant risks when in a speech last year she used the concept of human security to argue that the line between development and foreign policy is fading. She argued that new thinking puts “human security” first and demands that new links be made between poverty programmes and those targeted at peace and security. “Some in the development and foreign policy worlds still believe there is a hard and fast distinction to be made between development and foreign policy”, she told a London audience. “The truth is that these distinctions are losing their meaning. Development assistance – what form it should take, how much there should be, who gets it and how best to spend it – remains a vital issue. There is no doubt about our commitment to the MDGs or to poverty alleviation. That is the primary objective of the European Consensus on Development. Over half of the EU's commitment to increase aid will go to Africa and we will continue to prioritise our support to the least developed and other low income countries. But that’s not the whole story of EU aid”.

Human security is not a bad way to capture the idea that issues are related and important to the extent that they have an impact on the welfare of individuals. The concept was taken up at the outset of this new century precisely as a way to avoid development concerns being swamped by post 9/11 concerns with the “war on terror”: physical security matters, but so too does food security, water security, environmental security and so on. The UN Commission on Human Security made much of this multiple meaning of the term “security”.

This should not mean that the budgets for development and security are somehow merged, so that pro-poor expenditures are diverted into peace-making or peace-keeping. In the EU, this translates into a fear that “our” money, for development, is being diverted to CFSP budget lines or to quasi-development in the EU’s immediate neighbourhood.

This has nevertheless been a real concern. When the EU’s new budget, the Financial Perspectives for 2007-13, was agreed in December 2005, a single number was given for the whole of what was called “Heading 4” – the EU as a global partner. The total figure amounted to €50bn in 2004 prices and in real terms represented an increase of 4.5% a year. However, the total was not broken down between the six main instruments or areas of expenditure, which included development, but also pre-accession spending, European neighbourhood spending and a stability fund. Observers were rightly concerned that when real resources came to be allocated, development spending would be displaced, possibly in the name of human security.

Those fears have to some extent since been dispelled. A detailed breakdown is now available which shows the development instrument ring-fenced at €15bn, with the total in 2013 being 25% higher in real terms than the figure for 2006. This is a slightly smaller increase than for the budget as a whole (29%), and a good deal lower than for CFSP (245%) or for pre-accession spending (52%). The planned figures therefore offer some “protection” of development expenditure, and it is worth noting that the Financial Perspectives do not include a further €22bn of financial support for the European Development Fund over roughly the same period. Provided that all these monies contribute to the achievement of the Millennium Development Goals (MDG), they will be making a substantial contribution to the EU’s pledge of increased aid that its member governments agreed in 2005. But it should also be noted that any money in the budget that does not qualify as official development assistance should not count against the aid pledge.

A second risk that also needs to be considered is that money safely earmarked within the development budget may nevertheless be diverted away from the provision of services to the poorest, again in the name of human security. There may, for example, be a blurred boundary between local conflict resolution, mine-clearing or policing and national or even global interventions which offer only very indirect help to the poor. Do peace facilities count? And what about what Commissioner Ferrero-Waldner called “humanitarian disarmament”?

Here, a different set of safeguards is required. In part, they can be general, as in the case of the European Consensus on Development. More specifically, and in the case of the new development instrument, they can be found in the Regulation which determines how the money will be spent. This has the force of law and is unambiguous:
• The primary and over-arching objective is the eradication of poverty;
• At least 90% of the funding will qualify as official development assistance, using the criteria of the Development Assistance Committee of the OECD;
• Assistance will not be used to finance arms or ammunition, or operations having military or defence implications.
The document goes on to describe what is expected to be funded, using familiar language about sustainable development, poverty reduction and human development.

The wording in this document gives every impression of some hard bargaining during drafting, and its true worth will need to be tested during delivery. At first sight, however, the safeguards appear strong. If this is the case, then a final question arises. Why is the share of aid delivered through the Commission only about 20% of the total from EU member states?

This is in part an arithmetical artefact. The scale of development spending through the EU is fixed by the budget decisions made for the Financial Perspectives and by the negotiations over the new European Development Fund. Both of these are driven by factors largely unrelated to the overall size of member states’ aid budgets. For the EU as a whole, development spending up to 2013 is slated to increase by about 20% a year. Taking the Financial Perspectives and the Development Fund together, the figure to be spent through Brussels is only about a quarter of that. Thus there is a paradox: although the EU is “getting its act together”, its market share is falling.

This is a topic for another day and a different article. But my own solution to that dilemma is to propose that the European Union should have a new MDG Fund of €5bn a year that would be poverty focused and large enough to enable the Commission to maintain its market share. It would also, by the way, provide a lever, an incentive, to encourage further reform. And it would be consistent with the new human security paradigm.