Global IssuesEU: 'Aid Must Also Aid the Giver'
Aid to poor countries should be tailored more towards benefiting European firms, a top-level Brussels official has recommended.
Andris Piebalgs, the European Union's commissioner for development, is seeking a new aid strategy that has 'value for money' as an overriding priority.
In a letter to EU governments ahead of a Jun. 17-18 meeting of their leaders, Piebalgs argues that the objectives of aid should be in line with those contained in the recently approved Europe 2020 initiative, which lists the Union's key areas of focus for the coming decade. Although that initiative primarily relates to the economy within Europe, it also commits the Union to removing obstacles that large companies face in doing business abroad or in gaining access to the natural resources of foreign countries.
'I believe it is vital that we focus on getting real 'value for money' from the aid granted; that every euro granted leads to as much as 10 or more euros in investment,' Piebalgs wrote. 'The Europe 2020 initiative is in reality just as relevant to the developing world as it is the EU - only through catalysing jobs and growth in the developing world will the vicious circle of aid and dependence be broken.'
Europe 2020 mirrors the recommendations put forward in a paper published by BusinessEurope, an organisation representing some of the world's most powerful companies, in February. Titled 'Going for Growth', the BusinessEurope pamphlet urged the EU to work towards ensuring that firms based in this continent enjoy 'full and undistorted access to raw materials' found abroad.
Anti-poverty campaigners have stressed that there is a legal and moral onus on the EU to ensure that development aid is primarily driven by efforts to improve the lot of the world's poor, rather than to eke out new investment opportunities for business.
Hussaini Abdu, director of ActionAid Nigeria, said that EU policy-makers are mistaken if they believe that economic liberalisation will lift Africa out of poverty. 'There is no (home-grown) private sector in Africa,' he told IPS. 'The only private sector in Africa is multinational firms, mainly from Europe. These multinationals are not only making huge profits, they are not paying taxes (under the terms of many investment accords).'
He said that the expectation that Africa will develop its economies by giving control of its resources to foreign firms is at odds with the way that other continents have been able to build up their economies through central planning. 'Africa has been long entangled in a web of neo-liberalism, that has not in any way enhanced African development. Europe was not developed by market forces, America was not developed by market forces. The engine of development was government. If Europe was not developed by market forces, we cannot expect Africa to be developed by market forces.'
Abdu was in Brussels for the launch of a new report 'Penalty Against Poverty', which highlights how the EU is failing to honour its commitments to increase development aid.
Whereas the Union's governments undertook in 2005 to earmark 0.56 percent of their collective national income to such aid by 2010, initial estimates for this year indicate that the level will be no higher than 0.46 percent. In total, EU development aid last year amounted to 49 billion euros (59 billion dollars) - about 1 billion euros less than the figure for 2008.
Some of the bloc's largest countries cut back their aid levels dramatically - Italy by 4.5 billion euros, Germany by 2.6 billion euros and France by 800 million euros.
Javier Pereira, a spokesman for Concord, an alliance of European anti-poverty groups, said that the shortfall is so vast that the EU's governments are 'putting at risk the progress' that has been made towards achieving the Millennium Development Goals. Set at a United Nations summit a decade ago, these goals stated that the incidence of maternal mortality, illiteracy, inadequate access to water, hunger and other key indicators of poverty should be drastically reduced by 2015.
The report calculates that the EU is 19 billion euros below what it had promised to allocate towards fighting poverty by 2010. Elise Ford, head of Oxfam's Brussels office, pointed out that this sum was a 'tiny fraction' of the money that Europe has been able to collect to support its own economies recently - such as the 750 billion 'bail-out' package for Greece.
Ford said that some campaigners have been accused of not being realistic in calling for higher spending on development aid at a time when Europe itself is struggling. 'It is worth dwelling on the fact that there are some member states that are keeping their commitments,' she added. 'The UK and Belgium increased their aid levels last year. So it (raising aid) can be done. It's a question of political will and of commitment to development.'
The report calls for a small tax - between 0.01 percent and 0.1 percent - to be imposed on financial transactions such as trading in currency, bonds and shares, with some of the resulting revenue used to fight poverty. If an international tax of that nature could be introduced, between 215 billion euros and 1 trillion euros could be generated per year, according to the report.
Ford said she was heartened by how the idea of a transaction tax is under consideration by some of the world's largest economies. 'Compared to a few years ago, this is a policy that looks very possible to have implemented,' she argued. 'It's being discussed.'
© Inter Press Service (2010) — All Rights ReservedOriginal source: Inter Press Service