Foreword

In Copenhagen in 1995, heads of State and Government gathered for the first time in history to recognise the significance of social development and to give it the highest priority now and in the 21st century. The result was a declaration which contained important commitments to achieve social development. It included particularly strong commitments towards Africa and the least developed countries: to accelerate the economic, social and human resource development (commitment 7). As a signatory of the UN Summit for Social Development the European Union made these commitments.

The European Union is now engaged in renegotiating its relationship with the countries of Africa, the Caribbean and the Pacific (ACP). The Lomé Convention will expire in the year 2000. In November 1996 the European Commission published a "Green Paper on relations between the European Union and the ACP countries on the eve of the 21^st century", as a first input into the debate on the new agreement.

The Community and its Member States have made commitments to social investment in general and to basic social services in particular. The debate on the new agreement between the EU and the countries in Africa, the Caribbean and the Pacific (ACP) provides an opportunity to live up to these commitments and apply them in future agreements. Now this must be put as a key element in the negotiating mandate of the Commission on the future agreement.

This is the fourth paper in a series on the future of the Lomé Convention presented by Eurostep. Eurostep first published a paper that set out the principles that we believe should act as the foundations for future agreements ("Partnership 2000 - A Eurostep Approach", September 1996). A comprehensive reaction to the Green Paper was presented in February 1997 ("Comment on the Commission Green Paper on relations between the EU and ACP countries"). In May 1997 Eurostep published a special paper on the future of Trade and Investment relations with the Lomé countries ("Partnership 2000: Eurostep’s Proposals on Trade and Investment").

Executive Summary

The crucial role of social investments

The primary objective of development cooperation should be the eradication of poverty. It is now widely recognised that providing access to social services to people living in poverty in developing countries is a key element of policies aimed at eradicating poverty. In addition access to income, education and health care are fundamental human rights. According to the World Bank, UNDP, and many other development institutions, investing in people - for instance, investing in primary education for girls - also increases the economic potential of a country. Literacy and good health are fundamental prerequisites for people living in poverty to be able to participate in development and in democratisation processes. They are also central to the empowerment of women.

Achievements and challenges in human development

The achievements in social development in the developing countries over the past decades are quite impressive. For instance: a much larger part (two-thirds) of the population is now literate, child mortality has fallen dramatically and the percentage of people with access to safe drinking water has doubled. Development aid has contributed to these achievements, even though only a small percentage of official aid has been used for such purposes.

However, major challenges in human development still lie ahead: 1.5 billion people have no access to basic health services and 900 million people are illiterate. Some 130 million children in primary school age - two-thirds of them girls- do not receive any basic education. In poor countries, budget cuts under structural adjustment have brought many basic social services beyond the reach of the poor. Many primary school and health service systems, in Africa in particular, are now in a deplorable state.

Clear commitments to social development

The broad recognition of social development as a key to development, has resulted in clear commitments at recent UN conferences, like the Social Summit and the Fourth World Conference on Women. Governments from the North and the South have committed themselves in particular to providing universal access to Basic Social Services. These are: primary health care, including reproductive health, population programmes, nutrition programmes with clean water supply and sanitation and basic education, as well as the institutional capacity for delivering those services.

Recently, donor governments have reconfirmed this by adopting new guidelines for official aid. The DAC/OECD policy document "Shaping the 21^st Century; The contribution of Development Co-operation" (1) commits donor governments to fundamental goals in social development, such as:

• universal primary education in all countries by 2015;
• demonstrated progress toward gender equality and the empowerment of women by eliminating gender disparity in primary and secondary education;
• a reduction by two-thirds in the mortality rates of infants and children under age 5 and a reduction by three-fourth in maternal mortality, all by 2015.

To achieve these targets in social development concerted efforts of donors and recipient countries are required. At the Social Summit governments were called to implement a 20:20 compact. This is a contractual agreement between donor and recipient country governments to allocate at least 20% of ODA and 20% of the national budget respectively to the achievement of universal access to basic social services (2). Only a limited number of northern and southern governments have actually started implementing these commitments.

At the same time priority needs to be given to using aid resources on social investments in general. NGOs therefore recommend that at least 50% of aid resources are allocated to such areas, including:

• Basic social services;
• Support to income-generating activities for people living in poverty;
• Strengthening social and civil organisations. (3)

In many instances the EU has committed itself to human and social development: in the Maastricht Treaty and the Lomé Convention, and, for example, as a signatory to the action plans resulting from the Social Summit and the Women’s Summit as well as in recent Council resolutions.

Notwithstanding all this, the EU still lacks a clear policy of implementing those commitments. The Green Paper does not even mention the concrete targets on social development that the DAC/OECD has selected as key elements for development assistance in the next millennium, let alone identify the need to establish mechanisms within a future agreement for achieving these and other commitments that have been made by the EU and its ACP partners.

There are no clear figures available from the Commission on what it actually spends on basic social services. Recent research (ODI 1996)(4) suggests that in 1991-1995 of all EU aid to the Lomé countries at least some 13% (8.4% in project aid, plus 4.6% in programme support) was allocated to "social infrastructure and services". However, this category may include anything from basic education and rural health posts to universities, modern clinics and high cost urban water supply systems. The European Court of Auditors has very recently criticised the lack of priority for primary education and primary health care within the Community’s social sector support in Africa (5).

The potential of the EU

The EU is in many ways well equipped to help to achieve the social development priorities. Firstly, the EU has become the worlds 5^th largest aid donor, providing 7.1 billion US dollars or 10.5% of all aid disbursed by OECD countries (1995). It is a major donor to Africa in particular, where the need to give priority to basic social investments is increasingly recognised.

Secondly, the concepts of Partnership and Policy Dialogue are prominent in the current Lomé Agreement and in the Green Paper. These concepts fit in well with the contractual nature of efforts by both donors and recipient governments that are needed to achieve universal access to basic social services. The 20:20 compact could be well implemented within this framework.

Thirdly, the Commission already has some experience in budget support allocation to social sectors under its structural adjustment support programme of Lomé-IV. The Green Paper proposes a further expansion of budget support. Properly earmarked budget support can be an important instrument for increasing investments in basic social services, if the recipient government shares the same priorities.

Recommendations

• As a major donor, the EU has the capacity and the responsibility to help to achieve the commitments towards social development that have been made at recent UN conferences and that have been taken up by the international donor community in, for instance, the DAC/OECD document "Shaping the 21^st Century".
• Universal access to Basic Social Services and other elements of social development for the poor must therefore become central elements and targets in the next generation of development co-operation agreements between the EU, the ACP countries and other developing nations. This must be put clearly in the mandate of the Commission.
• A corresponding reallocation of EU aid towards achieving these targets is required, with the 20:20 compact serving as a minimum.
• The EU should seek to involve local communities and organisations of civil society in the design, provision and monitoring of these basic services, in order to improve their quality and effectiveness.
• The Commission should provide adequate reports and data on its efforts to contribute to achieving basic social services for the poor. Showing the real impact on poverty eradication that can result from investing in social priorities can also help to restore the European public's confidence in the effectiveness of aid.

In the present agreement between the EC and the ACP the objective to enhance social development is clearly enshrined. The objective of the Fourth Lomé Convention is to "promote and expedite the economic, cultural and social development of the ACP states (..). Support shall be provided in ACP-EC co-operation for the ACP States’ efforts to achieve comprehensive self-reliant and self-sustained development based on their cultural and social values, their human capacities, their natural resources and their economic potential in order to promote the ACP States’ social, cultural and economic progress and the well being of their populations through the satisfaction of their basic needs, the recognition of the role of women and the enhancement of people’s capacities, with respect for human dignity." (6)

Further to the agreement, the European Council adopted several resolutions (7) in which the European Commission, and the Member States, were called upon to enhance their efforts to achieve social development. In a resolution on Human and Social Development (8) adopted in 1996 the Council asked for Social development to be placed at "the very core of development co-operation." It confirmed a number of important commitments laid down in the UN Summit for Social Development, to which the EU is also signatory.

OECD countries reconfirmed a number of targets relating to commitments endorsed during the UN Conference on the Environment and Development, the UN Conference on Population and Development, the UN Summit for Social Development, and the UN Fourth Conference on Women. Some of these targets were reconfirmed in May 1996 by the high level meeting of the Development Assistance Committee (DAC) in Shaping the 21^st Century: The Contribution of Development Co-operation. A strategy for the use of official aid was agreed, aimed at achieving particular output targets, namely:

• Economic well-being:
• a reduction by one-half in the proportion of people living in extreme poverty by 2015.
• Social development:
• universal primary education in all countries by 2015;
• demonstrated progress toward gender equality and the empowerment of women by eliminating gender disparity in primary and secondary education;
• a reduction by two-thirds in the mortality rates of infants and children under age 5 and a reduction by three-fourth in maternal mortality, all by 2015;
• access through the primary health-care system to reproductive health services for all individuals of appropriate ages as soon as possible and no later than the year 2015.
• Environmental sustainability and regeneration:
• the current implementation of national strategies for sustainable development in all countries by 2005, so as to ensure that current trends in the loss of environmental resources are effectively reversed at both global and national levels by 2015.

Social development: more than economic growth

Economic growth does not automatically result in social development. The Human Development Report 1996 (10) finds that "the links between growth and human development are failing" and "more attention must go to the structure and quality of growth - to ensure that it is directed to supporting human development, reducing poverty, protecting the environment and ensuring sustainability." There is increased consensus that investment in people is a vital element of such a development process. The eradication of poverty cannot be achieved by a focus on economic growth that neglects social concerns. A country’s economy may grow for limited periods on the basis of mining its natural resources, or by large infusions of foreign aid, but to sustain the growth process it is necessary to ensure that its population is both educated and healthy.
 
 
 

During the preparations of the Social Summit hundreds of NGOs signed on to the ‘Benchmark document’ which criticised the draft declaration because "within it ‘poor’ people are still seen merely as victims. We feel it is regrettable that persons living in poverty are viewed as people in need of aid, instead of as citizens universally entitled to development and civil, political, economic, social and cultural rights. (11)" Access to education, health care, and food are fundamental human rights. The Covenant on Economic, Social and Cultural Rights (ESCR) recognises the right to work and to make a living, to health and to education, without discrimination. By ratifying the Covenant, governments commit themselves, inter alia, to progressively achieve the full realisation of the rights recognised in the Covenant "individually and through international assistance and co-operation, especially economic and technical, to the maximum of its available resources." (Art. 2). Contrary to conference declarations, the Covenant is a binding document, which overrules national law when a country ratifies it. They impose obligations on governments. Most countries have ratified the Convention. (12)

Social Development and Empowerment

The eradication of poverty can only be achieved if people living in poverty are empowered to demand their legitimate rights. The lack of popular participation creates a serious impediment to social development. In the African Charter for Popular Participation in Development (Arusha 1990) it was declared that in Africa "the political context of socio-economic development has been characterised, in many instances, by an over-centralisation of power and impediments to the effective participation of the overwhelming majority of the people in social, political and economic development. As a result, the motivation of the majority of African people and their organisations to contribute their best to the development process, and to the betterment of their own well-being as well as their say in national development has been severely constrained and curtailed ... (13)" The Conference concluded that a redirection of resources was needed to overcome the economic crisis in Africa. Resources should satisfy, in the first place, the critical needs of the people, in order to achieve economic and social justice and to emphasise self-reliance. This would also enable the empowerment of people to determine the direction and content of development, so that they can effectively contribute to the enhancement of production and productivity that are required (14). Women in particular are often excluded from decisions relating to the development process. This leads to an increasing impoverishment of women. Literacy and good health are fundamental prerequisites for people living in poverty to be able to participate in development and in democratisation processes. They are central to the empowerment of women.

Decreased access to basic social services

Although the relevance of universal provision of basic social services is now widely recognised by the donor community, economic adjustment policies promoted by the same donor community over the past 15 years have often had a detrimental effect on social investments. Budgets for education and health services tended to be the first to be cut as part of austerity measures. Privatisation resulting from structural adjustment has often resulted in increased costs for basic social services, which are vitally important for people living in poverty. This includes basic health care, primary education, access to clean water and fuel. For instance in Ghana:

Women are most affected by the negative results of structural adjustment policies. They are frequently excluded from decision-making, and even from participating in development activities. Yet, they constitute the majority of the people living in poverty. They are often in charge of subsistence food production. If working in industries, they are often the least organised and most vulnerable sectors. They, generally, earn lower wages. Women, as mothers with often sole responsibility for child-care, are also most affected by decreasing access in social basic services, such as basic health care, including reproductive health, and primary education. Significantly less girls are able to finish primary education:

In the Plan of Action of the UN Summit for Social Development, donor and recipient governments were called upon to mutually agree on a policy to prioritise social investment. The 20:20 compact is a contractual agreement in which 20% of development aid and 20% of the national budget of the recipient country is channelled towards basic social services. The 20% figure was identified as a target by international development institutions like UNDP and UNICEF because it was calculated to be about the level of investment necessary to achieve the provision of basic social services for all. In some developing countries universal coverage may be achieved by a little less; more may be required in others (19).

Basic social services were defined in the international meeting with government representatives on the 20/20 initiative in Oslo held in April 1996. It was agreed that basic social services comprises primary health care, including reproductive health, population programmes, nutrition programmes, clean water supply and sanitation and basic education, as well as the institutional capacity for delivering those services. Access to these services should be universal, while targeting the poorest and most vulnerable. Services like secondary education, university studies, urban hospitals, water supply technologies costing more than 30 $ per beneficiary are not part of the basic social services category.
 

The mutual agreement between donors and recipient countries to prioritise social development is crucial to achieving increased social investment. Without such a compact, an aid recipient government can prioritise investment in social areas, yet macro-economic conditions imposed by the international donor community can contradict such efforts. Equally, donors may allocate resources to social sectors in the recipient country but the governments may decide to channel funds away to other areas, such as military expenditure (this is called ‘fungibility’).

Access to social services in itself is crucial to social development, but it is not sufficient. Firstly, social development requires participation and empowerment of people living in poverty in the development process. Secondly, people living in poverty should also be given opportunities to enhance their possibilities to generate their own income. A broad range of NGOs from the North and the South (including Eurostep), therefore, advocated the position at the Social Summit that donors should allocate at least 50% of ODA to social sectors, including:

• Basic social services: basic education, primary health care, nutrition programmes, safe drinking water and sanitation;
• Support to income-generating activities for the poor in rural areas and for the urban informal sector, including small-scale credit facilities, training, technical and marketing assistance; public investment/employment schemes to generate socially productive jobs that progressively transfer ownership of assets to the unemployed; and investment in local agricultural production and food security systems combined with land reform measures targeted at poor women and men.
• Strengthening social and civil organisations, for example farmers’ associations, women’s organisations, co-operatives, trade unions, human rights organisations, to help increase their influence in policy decisions and their ability to access resources and secure their basic social and economic rights.

A number of countries like Norway, The Netherlands, Canada, Germany and Denmark are exploring the 20/20 initiative. Developing countries like Uganda, Burkina Faso, Tanzania, and Bolivia have expressed their interest in the 20/20 initiative.
 
4. Actual EU Aid Spending on the Social Sectors

It proves difficult to find out exactly how much aid is spent by the European Community on social investments. Social investments, and basic social services in particular, cannot always be recognised as separate categories, which points to an urgent need to work on a transparent reporting system. From the figures available it appears that overall spending by the Community on social sectors is on the increase. A recent DAC aid review concludes that under Lomé-IV "more emphasis was put on the social sector whose share rose from 6 to 9 percent (21)". A comprehensive study done by ODI last year suggests that the proportion of all European Community aid going to the education sector increased in the 1990s to over 5%; the 1986-94 average was 3%. From the same study it can be concluded that in the years 1991-95 a share of 8.4% of total EC aid to the ACP countries was allocated as project aid to "Social Infrastructure & Services", which comprises "Education, Health & Population, Water Supply and Other Social Infrastructure & Services". In addition, at least 4.6% of total aid to the ACP countries over this 5 year period was provided to health (370 MECU) and education (260 MECU) as budget aid in the form of counterpart funds from structural adjustment support, food aid, Stabex and Sysmin. It can therefore be concluded from the ODI study that in 1991-95 about 13% of Community Aid to the ACP countries was allocated to social sectors (22).

Particularly the use of counterpart funds to finance social sector headings of ACP countries’ budgets has recently increased the overall spending of the Community in these categories. In eleven African countries, reviewed by the European Court of Auditors, 70% of these counterpart funds were allocated to health and education (23). However, the increase of allocation to social sectors does not automatically result in increased spending in social sectors. Governments can shift resources from one budget to another; in fact the Court of Auditors found in many instances that allocation of budgetary support to social sectors did not result in more spending under these budget headings of the recipient country. This is one of the reasons why it is crucial for donors and recipients to engage in a mutual agreement relating to overall spending of the budget.

Basic social services

The increase in social spending is important, but what is still missing is a clear link between the targets of universal access to basic social services and the Community’s actions. Allocation to "Social Infrastructure & Services" can include anything from basic education and rural health posts to universities, modern clinics and high cost water supply systems. It is unknown and unclear how much of the EC’s aid is actually allocated to the internationally agreed priorities in basic social services for the poor. However, in its latest report on the use of structural adjustment support in African countries, the European Court of Auditors clearly states that insufficient priority was given to primary education and primary health care. The report states that "in several of the countries visited the social services in urban areas were more favourably treated than those in rural areas, and an attempt to redress this imbalance of public financing must be made. Similarly, as far as education is concerned, the priority given to primary education has not always been high enough. A similar situation was observed in the health sector, where primary care has not always been given the appropriations it required". The Court illustrates this with, among others, the example of budget support to health in Burkina Faso: "In the health sector, the priority given to primary care has remained too low, whilst running costs of the central services and tertiary care ate up more than 40% of the Health Ministry’s operational appropriations. If the Community’s assistance is to benefit the poorest people, the proportion of the budget allocated to primary health care ought to be increased."

 
ANNEX 1: Social Development: What has been Achieved?

Progress made in human development

If there is one area in which progress in the developing countries over the last decades can be shown, it is in the field of human development. Dramatic improvements in overall indicators of human welfare have been achieved over the last twenty to thirty years (DAC, 1996, 7) (24):

• in the developing countries life expectancy has risen by more than twenty years (from 41 to 62 years);
• the percentage of the population with access to clean water has doubled (from 35 per cent to 70 per cent);
• adult literacy has risen from less than half of the population to about two-thirds;
• food production and consumption have increased at a rate about 20% faster than population growth;
• every year, immunisation saves the lives of over 3 million children - but complete coverage with the vaccines already available would save 2 million more (UNICEF, 1996) (25).

However, there are many challenges ahead in the developing countries, which deserve continued support. One of the challenges is continued progress in coverage:

• Around 17 million people still die from preventable diseases and 1.5 billion people do not have access to basic health services;
• 130 million children of primary school age - two-thirds of them girls -- do not attend school; two-thirds of an estimated 900 million illiterates are women;
• more than one-third of the children are malnourished;
• maternal mortality is still 12 times as high in developing countries as in the OECD countries; almost 600,000 women die each year in pregnancy and child birth. And for every woman who dies, approximately 30 more incur injuries, infections and disabilities which are usually untreated and unspoken of, and which are often humiliating, painful and lifelong. (DAC, UNICEF, HDR) (26)

Impressive achievements have been made in basic education: enrolment has almost doubled since 1960. However, this increase in enrolment has stagnated in the past decade and especially in Africa the number of children out of school has actually increased with 2 million children since 1990 to a total of 39,3 million, of which 2/3 are girls (Mid Term Review 1996, 15) (27). Presently, less than 45% of girls in Sub Sahara Africa reach 4 years of primary school. And this figure is optimistic, hiding internal differences between areas and groups. Take for instance Burkina Faso: 68% of the urban children attend primary school, as opposed to 27,5% in the rural areas. One third of the children drop out of school in the first 4 years - which means they will be practically illiterate. For every 10 boys in basic education, there are only 7 girls. Less than 15% of the girls in the rural areas will have attended primary school and have learnt how to read and write (28).

 
Footnotes

1. Shaping the 21st Century; The Contribution of Development C-operation, Development Assistance Committee, OECD, 1996.
2. Report of the International Meeting on the 20/20 initiative, Oslo, 1996.
3. This position was adopted by NGOs during the preparatory process of the World Summit for Social Development.
4. Cox and Konig, Inventory of European Community Aid, ODI, 1996.
5. Official Journal of the European Communities, 12 .11.96.
6. Article 1 and Article 4 of the Fourth Lomé Convention.
7. Other resolutions are: Co-operation in developing countries in the field of health, 1994; Food Security Policy and Practices, 1994; Education and Training, 1994; Fight against HIV/Aids in the Developing Countries, 1994; Integrating Gender Issues in Development Cooperation, 1995.
8. Council Resolution, Human and Social Development and European Union Development Policy, 22.XI.1996.
9. This is not referred to in the Resolution.
10. Human Development Report, UNDP, 1996.
11. The Quality Benchmark for the Social Summit, an NGO statement for the third session of the Preparatory Committee, 11-23 February 1995.
12. Social Watch 1997, No 1, 1997: 22.
13. African Charter for Popular Participation on Development, Arusha, 12 - 16 February 1990, E/ECA/CM.16/11:17.
14. ibid.: 18.
15. Tetteh Hormeku, Ghana, The Number of the Last Five Years, Social Watch, No 1, Montevideo, 1997: 163
16. Edward Oyugi, et. Al. Kenya, Structural Adjustment and Public Social Spending, Social Watch, No 1, Montevideo, 1997: 185.
17. Jessy Kwesiga et. Al. , Uganda, Gender and Poverty, Social Watch, No 1, Montevideo, 1997: 230.
18. Tetteh Hormeku, Ghana, The Number of the Last Five Years, Social Watch, No 1, Montevideo, 1997: 161.
19. In Uganda for instance, NGOs have recently argued for a 30/30 compact, because they analysed that a more substantial increase in social investment will be needed to bring basic social services within the reach of all the people.
20. Report of the International Meeting on the 20/20 initiative, Oslo, 1996.
21. DAC Aid Review, 1996
22. Cox and Koning, Investory of European Community Aid, ODI, 1996.
23. Official Journal of the EC, 12.11.96.
24. Shaping the 21st Century; The Contribution of Development C-operation, Development Assistance Committee, OECD, 1996.
25. The State of the World’s Children, UNICEF, 1996.
26. Shaping the 21st Century; The Contribution of Development C-operation, Development Assistance Committee, OECD, 1996; The State of the World’s Children, UNICEF, 1996; Human Development Report, UNDP, 1996.
27. Amman and Jourdan, Education for All, Achieving the Goal, UNESCO, 1996.
28. Social Watch Report, Instituto del Tercer Mundo, 1997.

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