THE DEVELOPING WORLD
Europe's governments are failing their global poverty commitments
Spring 2006
Many Western governments, including EU ones, are allowing the UN Millennium Development Goals to slip. Former Dutch development minister Eveline Herfkens, who is the UN Coordinator of the Millennium Development Goals campaign, says it's not too late to get the global poverty eradication effort back on track, but the process needs a strong dose of political will
We are at a critical juncture in the fight against global poverty; less than 10 years away from the deadline set in September 2000 by 189 world leaders to eliminate poverty and improve the lives of the world’s poorest. The world’s heads of government committed themselves at the United Nations to fighting poverty, hunger, gender inequality, environmental degradation and HIV/AIDS, and to improving access to education, health care and clean water, all by 2015.
These commitments – known as the Millennium Development Goals (MDGs) – are still technically and financially within our reach, but only if concrete action is taken to implement them. This in turn will only be possible if leaders – including those in the European Union – exercise the political will to live up to their promises.
There are two particular areas in which tough decisions are needed to bring about policy change. These changes require political will, while they could significantly increase the likelihood of meeting the MDGs. First, the EU must reform its trade and agricultural policies which impoverish and undermine markets and food security in poor countries. Second, European countries need to live up to their commitments to increase aid, and must ensure that this aid actually helps poor countries to achieve the MDGs.
It must be clearly understood that while the EU and other rich countries have an important responsibility for creating the conditions that would allow poor countries to meet the goals, the primary responsibility for the MDGs lies with developing countries' leaders. It is they who must implement the policies needed to meet the goals, and they have to reinforce these efforts by improving governance, transparency and accountability.
Even before the Hong Kong ministerial meeting of the World Trade Organisation (WTO), called to determine the outcome of the current Doha Round of trade negotiations, I was sceptical about the likelihood of its delivering the necessary changes in EU trade and agricultural policies. My scepticism was borne from experience. For many years, the EU has promised improved “coherence” between its development objectives and its trade and agriculture policies. Coherence has in fact been a treaty commitment since the Maastricht treaty of 1991, yet nothing has happened.
Remedying the problems created by European trade and agricultural polices would require a host of measures. To start with, the EU should finally set a date for the complete elimination of export subsidies in agriculture. Moving on, it should cut its trade-distorting domestic subsidies in agriculture, starting with product-specific caps and leading to their elimination in the medium-term. The EU should also open its agricultural markets to developing country exporters by cutting tariffs on agricultural products. Substantial cuts in tariff ceilings are needed because actual applied tariffs are often much lower than the presently-allowed ceilings (meaning that anything but sharp cuts in ceilings could leave applied tariffs the same). Moreover, the EU wants to exclude an ample percentage of agricultural products arguing that they are “sensitive” goods. The World Bank estimates that exempting even 2% would wipe out three-quarters of the potential benefits of the Doha Round.
Going further, the EU also needs to open up its non-agricultural markets to all low-income countries and to make this market access effective. At present, even under the “Everything but Arms” initiative – where least-developed countries can export everything but arms, sugar, rice and bananas – exports are hampered by complicated and rigid rules of origin and non-tariff barriers.
All this would take strong injection of political will into the EU's trade debate, although I myself find it difficult to understand why. After all, how much political will does it take to save the average European family the €100 or so a month that the present agricultural policies cost them? Particularly when it is a handful of large-scale industrial farmers who are the primary beneficiaries.
The EU needs to open its markets to developing country exports, and it should do this without asking for commitments in return from poor countries. Pascal Lamy, when EU Trade Commissioner from 1999-2004, promised African and other least developed countries a round of trade opening at the WTO “for free.” This has not materialised, and instead the EU is making aggressive demands in services and manufacturing.
Aid alone will not, of course, be enough to achieve the MDGs. But more aid would certainly help developing countries in their efforts to achieve the goals. Improvements in governance in sub-Saharan Africa have led even “hard-nosed” World Bank economists to conclude that they could easily put more aid to good use. Moreover there are several important global initiatives, such as the Fast-Track Initiative for education, that remain seriously under-funded.
Even with the present European commitments, very little additional money will become available for poor countries to achieve the MDGs. If existing commitments are implemented, total official development assistance (ODA) will increase from $78.7bn in 2004 to $97bn in 2006. But as debt relief counts as ODA, this increase is likely to be largely wiped out by the $15bn in debt forgiveness earmarked for Iraq this year and last.
By setting a deadline of 2015 for collectively achieving the ODA target of 0.7% of gross national income (GNI), the EU is now leading the pack on aid volume. Yet 2015, and even 2010, when the interim target of 0.56% must be met, are still far off and could easily be ignored by donor governments. One way of getting round this problem would be for individual countries to draw up credible schedules with annual implementation targets. Some countries have already done this, but others including Austria, Germany and Italy, have not. In Barcelona in 2002, these same countries committed to increase aid to a minimum of 0.33% of GNI by 2006. It remains to be seen whether these countries will meet this targets, and indeed whether they will inject fresh resources, or whether they will just use one-off debt relief packages to do so.
Increasing the volume of aid is only half the battle, I agree with the Africa Commission that without improvements in aid delivery there is little point in increasing aid, but the first battle must be to ensure that aid goes to those countries most in need of funding to meet the MDGs. For too long, donors have used development aid to pursue geo-political objectives, with far too much aid going to middle-income countries. I used to say that France and the UK were more interested in reducing child mortality when it meant saving French- or English-speaking babies. Today, Spain continues to channel a lot of its aid to middle-income Latin American countries. The European Commission devotes a lot of resources to its Neighbourhood Policy and to other middle-income countries, while also attempting to include security and anti-terrorism assistance in ODA. Such policies and expenditures are legitimate, but they shouldn’t squeeze out scarce resources meant to assist poor countries in achieving the MDGs.
Countries must also stop pursuing commercial interests through aid. As UN Secretary-General Kofi Annan noted in his report “In Larger Freedom”, “aid should be linked to the local needs identified in countries' national strategies and to the achievement of the MDGs, not to the interests of suppliers in donor countries.” At least EU member states should in their bilateral aid procurement procedure comply with single market rules.
EU countries and the European Commission must better coordinate their aid and harmonise their aid practices. The EU donor atlas shows how multiple European donor entities each spread their budgets thinly over many sectors in many countries – and demonstrates that this is simply not an efficient use of resources as it reduces the value and impact of European aid. It also imposes a crippling burden of administrative and other costs on recipient countries, undermining their own institutional capacities. Instead of developing and implementing their own policies, government officials spend valuable time preparing separate reports for each donor, and accommodating their different procedures and reporting requirements of each donor. Instead of being accountable to their own people, they find themselves entertaining hundreds of different donor missions every year.
Achieving the MDGs is a challenge that will certainly require steely determination and large amounts of political will by all those leaders across the world, including those in the European Union. But the MDGs are achievable. We are, after all, the first generation to have the knowledge, technology and resources to eliminate poverty and to create a better world for future populations. In 2000, we have also achieved political consensus at the highest political level on the priorities and on the division of responsibilities. We cannot afford to miss the opportunity this gives us to eradicate global poverty simply because we don’t have the political will.