Introduction
The Commission Green Paper on relations between the European Union and the ACP countries on the eve of the 21st century should be welcomed as it gives some early
impetus to reflections on the future of the EU's relations with developing countries. This ought to enable extensive debate and consultations which involve a broad range of
actors involved in development co-operation, including civil society in Europe and the ACP countries. The quality of these consultations and the willingness of the Commission
and EU Member States to respond to the views expressed, will in many ways define the usefulness of the Green Paper in gaining public support, in both EU and ACP countries,
for the resulting proposals of the EU that will be presented to the ACP states in 1998.
The stated aim of the Commission is to revitalise ACP-EU relations, within the context of changed political and economic conditions for development, and changed attitudes in
Europe. The Green Paper observes that the relationship between the EU and the ACP countries will enter a new phase, that this renewed relationship will have to be based in the
new global reality and that the innovations introduced will have to increase the efficiency of the co-operation programme. It considers the following framework:
This paper sets out Eurostep's initial comments on the Green Paper. It uses Eurostep's discussion paper Partnership 2000 - an Eurostep Approach as the basis for these
comments.
General remarks
The Green Paper contains an extensive analysis of the context in which the EU's co-operation policy with the ACP now takes place together with the prospects for the future. It
also sets out a list of ideas and possible options for incorporation in any future agreement. Many draw on existing instruments, resolutions and arrangements but give few details
on how these might be implemented. This is a weakness in the Green Paper as it is difficult to assess some of the proposed options without a greater understanding about how
they can be implemented in practice.
Although various options are given on key areas for the future relationship between the EU and ACP countries the underlying principles for the future co-operation agreement
that are indicated point to implicit preferred choices. These promote a regionalised approach in place of a global Convention; a differentiated trade regime including reciprocity for
many countries to bring trade co-operation in line with WTO rules; the rationalisation of the aid programme away from project support towards budget support with greater
conditionality based on performance over longer periods in macro-economic, monetary and social areas; and an increased inclusion of new actors in the co-operation, particularly
the private sector and NGOs.
While this appears to be the implicit preference of the Commission the main problem with the Green Paper is that it does not clearly identify its objectives. What does the
Commission hope to achieve? What are the aims of a new development co-operation that can provide benchmarks against which the value of the options provided can be
measured?
It is not only external circumstances that lead the Commission to start such a profound discussion on the future of Lomé. The DAC review pointed to the profound lack of
administrative capacity of the Commission. In the Discharge of the 1995 budget the Development Co-operation Committee (January 1997) draw attention to a great number of
insufficiencies the Commission has in implementing the development co-operation programme, based on the analysis provided by the Court of Auditors (1996).
Lack of capacity is obviously not one that can simply be solved by the Commission. The European Programme needs the support of the member States. To get this, it needs the
support of the European citizens. In order to raise that support the programme has to be effective.
Over the next few months we can expect many proposals from the Member States, some of which will aim to severely curtail the role of the Community in the EU's cooperation
programmes. They will argue that the Commission should be limited to a few aspects of co-operation for which they have proven competance. The rest should be left to the
Member States own programmes. The danger with such arguments will be that they are based largely on the vested interests of the individual Member States and not necessarily
on developing a vision for the future co-operation programme of the EU as a whole. What should be demonstrated now is that new proposals have a better chance of succeeding
and why that is the case. In that exercise the failures and successes of the past Lomé Conventions need to be well analysed.
Integration of instruments
A critique in the Green Paper is that too many instruments have been established, each with their own distinct objectives, and that these do not all work well together. This is
most certainly true. The diversity of instruments are unmanageable both for ACP countries and the Commission. There is a clear rationale in establishing a simplified co-operation
agreement with clear objectives. The Green Paper fails to do this, as it opens up a panacea of options without a good framework of how the different aspects of development
hang together, including macro-economic, trade and social aspects. A clear and explicit set of objectives should be guiding all aspects of co-operation to ensure that they remain
coherent. A simplification of aid mechanisms is necessary, which give much greater responsibility to the recipient countries' governments, together with a transparent set of
conditions to which the granting of aid will be subject.
Aid with impact - investing in social development
Despite being a signatory to the Declaration and Programme of Action of the World Summit for Social Development which seeks poverty eradication the Commission continues
to refer to poverty reduction in the Green Paper. Although the Campaign against poverty is regarded as one of the main objectives of the EU's development co-operation there
is no real analysis in the Green Paper as to how poverty can be reduced (let alone eradicated) except as a result of economic growth and the integration of developing countries
within the world economy. This is somewhat surprising as the resolution on Human and Social Development (adopted by the Council in December 1996) gives very clear
indications of how poverty can be tackled through an approach which enhances human capital. Such an approach could have been a basis for proposals set out in the Green
Paper. In addition the targets set out in the DAC document, Shaping the 21st Century, could have been incorporated into the Green Paper.
Much of the Green Paper's focus on measures for implementing support for social policies identifies the guidelines that have been developed through the different resolutions
adopted by the Council as part of the Horizon 2000 perspectives. It is proposed that these policies are implemented through budget support, with the project-based approach
being abandoned.
The mechanisms for ensuring that budget support is used for poverty eradication are not spelt out. While the Community already has some experience with counterpart funds and
structural adjustment support, it cannot be automatically assumed that budget support is used towards strategies for eliminating poverty. The European Court of Auditors notes
in this respect that "...although the provision (..) of the Lomé Convention insists that particular attention be paid to the most vulnerable social categories, (..) it is clear that in
some countries there has been a shift in favour of measures to restore the financial equilibrium to the public sector. In so doing, the EDF's resources have not been allocated
in full to the poorest elements in society."
Eurostep has long been advocating the position that 50 % of aid allocations should be used for social sectors - particularly where Structural Adjustment Programmes have led to
a severe undermining of the basic health and education provisions. The Court went on to observe that, in general, EC budgetary support to the social sectors of countries that
they investigated was insufficient. They recommended that a rate which significantly exceeds 50% should be considered the minimum to ensure that an adequate volume of total
funds is used in social area. In particular, basic health care and primary education have been identified by the Court of Auditors as areas where greater budget expenditure is
urgently required. In this context a 20% budget allocation to basic social services by the recipient state should become an element of the Community's criteria for providing
support.
The Court also noted the need to ensure that the effects of budgetary support are not undermined by the structural adjustment programmes. This would require a close
co-ordination with the IFIs and with the Member States, a key area scarcely touched on by the Green Paper.
A further weakness in the Green Paper is the absence of any discussion of the conditions under which budget support would be provided. Many elements are certainly
identified, and indeed have been incorporated into the Fourth Lomé Convention. These include good governance, the maintenance of human rights, and the establishment of
democracy. A small number of basic conditions are needed which are realistic and objective, so that they can be applied stringently. This should encompass the need for sound
financial management of all resources by the recipient countries.
Budget support can, in the end, only be justified if it can be demonstrated that it contributes to poverty eradication. Careful consideration should, therefore, be given to the
question of how people living in poverty are benefiting from the support.
There are clear advantages to budget support. Firstly it provides an opportunity to give greater responsibility in the management of the programme to the recipient country.
Secondly it allows a clear set of objectives to be identified which can be evaluated over time. However, budgetary support needs to be specifically directed towards particular
areas of expenditure. In addition the provision of budgetary support needs to be contractual to ensure that the objectives of the overall budget are agreed and are likely to be
achieved. This can only be realised through an adequate policy dialogue between the EU and recipient countries. Inevitably this cannot be done in isolation from the rest of the
donor community and requires increased donor co-ordination. Finally there also needs to be an ability to measure the achievements against the agreed objectives and the
monitoring of the programme against a pre-determined set of criteria demands a capacity within the Commission which it currently does not have.
It can be expected that not all of the current ACP countries would be able to meet the criteria by which the Community would provide budgetary support.
Emergency Assistance
The EU is the world's largest donor of emergency aid, yet the Green Paper gives little attention to the role of humanitarian assistance and its relationship with the development
process. This is particularly important as many countries that fail to qualify for budget support will be recipients of humanitarian funds. Policies and strategies for transforming
situations of conflict and other disasters to enable peace and security to be achieved should be an integral part of the EU's co-operation with ACP countries.
Conflict prevention and resolution
With the focus given to conflict resolution and development by the Commission, and the significant cost to the European Union in responding to the consequences of war and
violent conflict we would have expected this to have some prominence in the proposals set out in the Green Paper. While it acknowledges that conflict prevention should figure
among the major co-operation objectives and that peace and security are minimum conditions for development it is surprising how little attention is paid to conflict prevention and
its resolution. The Green Paper could have drawn on the Commission's Communication of last year that focuses on conflict in Africa.
The analysis in the Green Paper suggests that peace and stability stem from economic growth and good management of the State but at the same time points to the perceived risk
in most ACP countries that prevents investment, thus constraining the possibilities of economic growth. The question is how to break out of this cycle?
The Community's development co-operation policies must seek to prevent conflict. In conditions of gross inequality of wealth and where there is conflict over resources, aid itself
can exacerbate a conflict or reduce tension between rival groups. Under these circumstances co-operation policies need to make aid disbursements conditional upon commitments
to human rights and humanitarian law. Aid and trade co-operation should seek to provide incentives for people to have a greater economic and social stake in peace than in war.
Aid should strengthen community organisations and other forms of civil society, particularly in forms that cross ethnic, religious and other divides; provision also needs to be
made to support women working on domestic violence, which can increase in post-conflict periods.
Coherence
The coherence of EU policies is a principle accepted in the Maastricht Treaty. The Commission argues that the various strands comprising foreign relations, including
development co-operation, be brought into a single effective whole where co-operation would retain sufficient autonomy to pursue its own objectives. If the aim is to enhance
consistency and continuity then it is important to ensure that all aspects of foreign policy support the development cooperation objectives. It is also important to ensure that
other policies of the EU that have an impact on developing countries do not undermine these objectives. A policy that ensures this, together with the means to implement it,
needs to be put in place. This is an issue that needs addressing within the context of the EU's future co-operation agreements and cannot be simply put aside.
Participation
Good governance and the promotion of democracy are now central to the Co-operation programme of the Community. The Green Paper identifies the need for more active
participation by representatives of civil society, both in dialogue on co-operation policies and in the implementation of operations. Developing debate between Government and
civil society both deepens the process of democracy inside a country, as well as strengthens the mandate of that Government in the implementation of its policies.
However, mechanisms for ensuring effective participation are not identified and on the basis of past performance significant changes would be needed in actual practice for this
to become a reality. The Green Paper puts overdue emphasis on the role of public institutions and too little on the role of civil society. Many projects fail because potential
beneficiaries or users likely to be affected by interventions often play no active role in the identification and consideration of potential interventions. Their involvement is not
actively sought. The need to understand and strengthen local level capabilities is paramount. The Commission should establish a mechanism to enable full participation of
representatives from civil society, from both European and ACP countries, when it comes to undertake the fundamental review of the ways the Community's instruments and tools
are designed and used. In addition an information disclosure policy should be established with a mechanism that enables people to obtain information on the programmes and
projects that the EC is supporting, together with a complaints procedure allowing people and communities that have been adversely affected by the implementation of a
programme supported by the Community to seek redress.
Lacking a gender approach
The Green Paper makes little reference to gender. Despite commitments made by the EU in the UN conferences, particularly in Beijing, and despite the adoption of the Council
resolution on gender and development in December 1995, the assessment of what has been achieved and the major political, economic and social trends under the Lomé
Convention does not dissagregate the impact on men and women. 70% of people living in poverty are women and the implications of this needs to be recognised. The
consequences should lead to an explicit inclusion within the proposals for the future of measures and strategies that promote gender equality. The Council resolution commits the
Community to support the economic empowerment of women and to control over their own economic resources. The Community programme was also commited to giving equal
access to development opportunities as well as to equality in the control of social development opportunities.
Trade and Investment
The Green Paper sets out a range of options for a trade regime between the EU and ACP countries in a future agreement. It states that the trade in the Lomé Convention are
incompatible with international trade rules since they are non-reciprocal and discriminate between developing countries with the same level of income. Yet within these rules there
is provision for a waiver for non-complying agreements - an Article XXV.4 waiver for non-reciprocal trade arrangements, and an Article XXIV.10 derogation for any regional free
trade area agreements. It is still feasible that even the current arrangements could gain such waivers with the combined support of the EU and ACP Member States within the
WTO. It is a question of political will.
For the trade policies to be integrated with the other instruments of the EU's co-operation with the ACP countries then the trade regimes adopted need to be set within a common
framework.
The preservation of the current regime under the Lomé Convention which is presented as the first option, is effectively discounted as having failed in its objectives as well as
being no longer tenable for the ACP group as a whole under WTO rules. Before dismissing this option entirely a more thorough analysis of the reasons for the relative lack of
success of these preferences should be undertaken. The Green Paper points to many key reasons for this lack of impact, all related to the internal conditions and economic
management of the ACP countries themselves. However, there are external constraints that need to be considered as well, including some Community policies, such as the
Common Agricultural Policy. There have been numerous instances, where European subsidised exports have undermined local production in ACP countries. At the same time, the
protectionism of the CAP has been an important barrier preventing many ACP products from being exported to EU countries.
Achieving coherence of the EU's non co-operation policies with development objectives is essential. Otherwise these will continue to have a detrimental effect on ACP countries
whatever the trade regime that is put in place.
Given the changes that have taken place in the environment in which international trade takes place it may be useful for changes to be made in the trade regime between the EU
and ACP countries. However, the objectives of these preferences need to be clear and the options adopted have to bring potential benefits to all ACP states.
Eurostep will be producing a further paper exploring the trade policy options for the EU's future co-operation agreement. The criteria against which we shall judge the possible
options for the future have been set out in our paper Partnership 2000 - an Eurostep approach. A new trade agreement should:
In addition, given the Commission's position in support of the Ruggerio proposals at the WTO for LDCs to have free access to the markets of OECD countries, we would have
expected this to be reflected in the Green Paper.
Given the increasing importance of foreign investment to the economies of developing countries, the Green Paper discusses it in relatively little detail. Significantly, that
discussion is predominantly in terms of host country obligations to investors, rather than investor responsibility. Eurostep recognises the potential benefits which properly
controlled foreign investment can bring, but emphasises the importance of developing country governments retaining the right to regulate the terms and conditions for the entry
and operation of FDI in order to support domestic capacity and encourage local enterprises to become more competitive. Eurostep believes that the EU should provide
developing countries with technical assistance to strengthen their capacity to negotiate more effectively for agreements which promote emerging industries and guarantee
minimum labour and environmental standards.
Political institutional framework
The Green Paper claims that political dialogue with the ACP States will have its place in the common external policy of the European Union and that strengthening of the political
dialogue is a condition of increased effectiveness of the ACP-EU co-operation. While the paper identifies much of the content that would need to be included in such a dialogue
little attention is given to the possible mechanisms through which a dialogue will be pursued. No reference is made to the present mechanisms contained in the Lomé Convention,
such as the Joint Parliamentary Assembly, or any assessment made on the role that they have played. This is a fundamental weakness as the mechanisms for dialogue are an
essential component of any effective partnership
Implementation
A key question, that is not given sufficient attention within the Green Paper is the capacity of the Commission to implement the implicitly favoured proposals in the paper. Many
of the failures of the Community programme, which the Green Paper identifies, are partly the result of limitations within the Commission itself and the procedures established by
the European Union for implementing the programme. The changes proposed in the Green Paper will require changes in the capacity of the Commission in order to implement the
new programme. The capacity that will be required needs to be clearly identified as part of the proposals. This is key to the success of any future agreement as the confidence that
will be placed in the role of the Commission within the overall co-operation programme of the EU, including both the Community and Member States programmes depends on
there being an adequate capacity to implement its role. This is not only crucial for achieving the objectives of complementarity and co-ordination set out in the Maastricht Treaty
and further elaborated in resolutions of the Council, but will also be an important factor in the thinking of the Member State governments as to what role the Community
programme should play in future with regard to the EU's development co-operation.
Conclusion
While the Green Paper has helped to initiate the debate on the future relations between the EU and ACP, much of the substance for this debate is still missing. This could have
serious consequences for the Community Programme because without a clear compelling rationale in which the role of the Community is sufficiently identified with respect to the
overall co-operation programmes of the EU, and where the means to implement specific ideas are not spelt out there is a danger that much of the positive aspects of the current
programme, and the opportunities for the future will be lost.
Eurostep believes that there is a crucial and unique role for the Community in the EU's development co-operation programme, where the best of the Lomé Convention with its
principle of partnership are combined with the clear objectives set out in Title XVII of the Maastricht Treaty. Any future agreement needs to make poverty eradication a principal
objective and have a single framework in which all instruments of co-operation - trade and aid - are bound by the common objective.