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Eurostep Weekly 473

Eurostep weekly

Regular News Update from Eurostep, N° 473
9 July 2007

New EU aid plan lacks focus on health, schools
A new EU plan to make development aid more predictable is not sufficiently focused on improving health and education in poor countries, the Dutch organisation Oxfam-Novib has complained.
Officials at the European Commission are currently discussing the possibility of basing part of aid to African, Caribbean and Pacific (ACP) countries on a six-year scheme whereby money is paid directly into the national coffers of recipients.
The scheme has been dubbed an ‘MDG contract’, in reference to the United Nation’s Millennium Development Goals of reducing extreme poverty by 2015.
Yet while the MDGs primarily relate to health and education, the Commission has proposed that its contract should also concern issues such as energy, infrastructure and investment climate. These have at most a tenuous link to the goals.
Sylvia Borren, director of Oxfam-Novib, described the inclusion of these issues as “very worrying”, especially as the Commission has been reluctant to prioritise health and education in its aid plans for the ACP.
Out of more than 60 country strategy papers that the Commission has drawn up for the ACP, the number that recommend making health or education the central focus are in single figures. This is despite how countries such as Zambia and Madagascar explicitly asked the Commission to concentrate on these sectors.
Borren was speaking at a seminar in Brussels organised by Europe External Policy Advisers (EEPA).
Despite her reservations about the Commission’s proposal, she recognised that long-term predictable funding is essential to deal with the chronic shortage of health and education workers in poor countries. Oxfam has estimated that over 4 million doctors and nurses and 2 million teachers are required to address such problems as infant mortality and illiteracy.
A key question for the Commission is whether its proposed contract will help to train and pay the health workers and teachers that are urgently required, said Borren.


MEPs push for generic medicine fund
The European Parliament is likely to urge this week that the EU finance the production of generic medicines in poor countries.
MEPs have been asked by the European Commission to rubberstamp a proposal making permanent a 2003 proposal ostensibly aimed at providing cheap drugs to the poor.
The 2003 proposal involved issuing a temporary waiver from the World Trade Organisation’s trade-related intellectual property rights (TRIPS) agreement. Under that waiver, poor countries are theoretically allowed to use compulsory licensing in order to import cheap generic versions of essential medicines they do not produce domestically.
So far, however, no small developing country has used that clause. Bigger countries that have used compulsory licensing – such as Brazil and Thailand – have come under severe pressure from the pharmaceutical industry and from many rich country governments, including the US.
Gianluca Susta, the Italian Liberal MEP tasked with preparing the Parliament’s response to the temporary waiver, has said that the only long-term solution on access to medicines is to help poor countries build up their own production capacity.
MEPs, he added, will refuse to make the temporary waiver permanent, unless the EU agrees to set up a fund for this purpose.


Trade deal will harm jobs - Ghana
A free trade deal with the European Union could increase unemployment and reduce public revenues, a Ghanaian minister has predicted.
Kwadwo Affram Asiedu, Ghana’s deputy minister for trade and industry, spoke out against proposals for an Economic Partnership Agreement made by the European Commission.
Efforts by the Commission to have Ghana cut or severely reduce most of the tariffs it applies to imports would cause a higher rate of joblessness and cut the exchequer’s tax revenues, he said. Ghana last week (2-3 July) hosted a summit African Union leaders, who considered the impact of the EPAs which the Commission hopes to conclude with African, Caribbean and Pacific (ACP) states by the end of this year.
Protests held in Accra ahead of the summit highlighted how the EPAs are likely to be unfair. Oxfam said that rules on the liberalisation of services favoured by the Commission threaten to drive local firms out of business and to extend the powers of large companies.


Transport favoured over health, admits Commission
The European Commission has decided that its development aid activities should not focus on health and education, a senior official with the EU executive has admitted. Anti-poverty activists have recently criticised the Commission for paying little heed to such issues as AIDS and illiteracy in a series of aid plans it is drawing up for the African, Caribbean and Pacific (ACP) countries.
Of 61 such country strategy papers so far drafted by the Commission for the 2007-13 period, just two recommend that health and five recommend that education should be a priority. Nineteen, on the other hand, suggest that transport should be a focal sector.
Françoise Moreau, head of the policy coherence unit in the Commission's directorate-general for development, has acknowledged that her institution has deliberately decided to put the emphasis on infrastructural projects.
This decision was taken, she said, to ensure that there could be an effective division of labour between aid programmes administered by the Commission and those of the EU's 27 member governments.
"Our member states usually prefer to focus on health and education rather than transport," she said, during a conference hosted by the Society of International Development in The Hague. "If we are to complement these efforts, this leads to the Commission focusing more on infrastructure."
Moreau also claimed that ACP governments have asked the Commission to concentrate its aid activities on infrastructural projects.
Yet this conflicts with allegations made last week by the Stop AIDS Alliance. The campaign group said it had evidence that the government of Zambia, where an estimated 18 percent of the population are HIV positive, had asked the Commission to prioritise health in its aid planning but that the EU executive turned down the request.


Ministers mull IMF vacancy
The EU’s finance ministers will consider this week (9 July) who should be the new head of the International Monetary Fund.
Dominique Strauss-Kahn, finance minister in the French government during the late 1990s, has been tipped as the man most likely to succeed Rodrigo de Rato, who recently resigned as the IMF’s managing director.
Anti-poverty activists have urged European ministers to end the system whereby the IMF is automatically headed by a European.


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