It is from here, in this giant glass building in Brussels, with its intricate halls, winding corridors and twenty odd languages that the European Commission is reaffirming its aid commitments to developing countries amid the financial crisis.
Heavy machinery is pounding away outside, the subway is under renovation, and those who enter the adjoining International Press Centre have to literally traverse a construction site. It’s a fitting setting for an institution whose political framework governing aid development amidst the current global recession is in itself a work in progress and a mess.
Among all the hard hats and noise, the Charlemagne building stands like an overpriced trophy of European administration and might. The supranational powers that emanate from this colossal building, strips away sovereignty from the often-reluctant 27 Member States, and attempts to coordinate policies whose reach is far and wide. Seventy-eight developing countries receive aid from Europe. So the clout of Europe is there as is all the associated confusion, debate, money and god-awful acronyms.
At the press conference on April 8, the beleaguered José Manuel Barroso, President of the European Commission, stood alongside his homologue Louis Michel, Commissioner responsible for Development and Humanitarian Aid. Both men were adamant in their declarations that Europe’s financial recovery plans are intricately tied to development aid.
“Those least responsible for the financial crisis are among those the worst hit by its economic effects,” said Barroso. Few would argue that.
Indeed, the global recovery plan cannot succeed if the needs of developing countries and their citizens are not addressed. But the ideas coming out of Brussels, while politically correct, lack any real substance. No new money will be appropriated and no real commitment on climate change and tax evasion were announced said the head of European policy division at ActionAid.
According to Michel, Europe must rid itself of a status quo that protected existing production structures which in turn maintained the existing state of poverty. On April 6th, the Commission therefore pledged to remove unfair regulatory barriers with Eastern and Southern Africa in the context of its North-South Corridor project.
The European Development Fund (EDF), for instance, plans to spend €22 billion between 2008 to 2013 developing economic regional integration and strengthening regional political institutions.
The EDF is an attempt to reverse a policy that granted non-reciprocal preferences which did little to advance the cause of African, Caribbean and Pacific States (ACP) countries. Its real impact has been less than satisfactory as the Commission imposed aid priorities on governance and competition over health and rural development.
I’ll never forget seeing oranges from Europe in a supermarket in Nairobi less expensive than those grown locally. In a continent where 300,000 million live in extreme poverty, it is not surprising that Africa’s share of total foreign direct investment is less than 2% percent.
The EDF is still, however, a policy founded in trade liberalization and given the West’s track record and Africa’s endemic corruption, those who stand to benefit are those who know how to siphon it off. Trust or more precisely, the lack of trust, has no price tag, after all, diamonds are still being cut in Antwerp and the $40 billion promised to Africa at Gleneagles in 2005 has yet to materialize.
“Africa”, says President Barroso, “is Europe’s number one priority in terms of development aid.” Then, in those terms, Africa is crucial to Europe’s re-launch of the global economy but by introducing new logistic mechanisms to address these issues, Europe is once again at risk of losing itself in administrative red tape despite having vastly streamlined aid implementation procedures according to a December 2008 report by the European Centre for Policy Management. These complexities add to the transaction costs and reduce aid effectiveness.
Only a week earlier, the G20 leaders committed a lucrative $250 billion package to refinance the International Monetary Fund (IMF), an institution with a dubious history in many of Africa’s countries. On the streets, people protested and for good cause and one man died from police brutality. No real commitments on quota reforms are yet another indication of the counterproductive procrastinations of high-income states who allowed their financial institutions run the world into the ground. And the issues of Millennium Development Goals, climate and unemployment were more or less skirted.
Before the G20 summit in London, 17 imposed protectionist measures that undermine those commitments to stimulate the global economy. Self-interest and survival became the norm and the G20 a stage for a play with all the décor and accoutrements to match. Barroso was also there, telling leaders and executives about Europe’s staggering aid figures to Africa – those same people who are directly or indirectly responsible for this mess and the surge of global poverty. The International Labor Organization (ILO) is predicting that over 50 million people in developing countries will lose their jobs before year’s end.
And then in December of last year, Member States committed themselves to increase assistance at the Doha Conference on Financing for Development. Member States are supposed to contribute 0.70% of their national GDPs to development aid by 2015. It is doubtful they will succeed. In December, Italy cut its aid by %50. But the Commission is hoping that by 2010 the collective promise of 0.56% of EU GNI made at the Gleneagles Summit in 2005 will be met. That’s another €20 billion in the purse and another very expensive promise.
Despite the financial crisis, the Commission is pressuring Member States to stay on track on their commitments to developing countries. Europe, while committed, is however struggling to implement a harmonized international development program. Today, the implementation of development aid in Africa is fragmented and stunts the full operational capacities of countless projects. There are 600 development projects in Tanzania alone says Michel but many are duplicated by Member States and resources are subsequently wasted.
Of Europe’s €49 billion spent on development aid in 2008, of which 80% went to Africa, an astounding €7 billion was squandered on bad management according to a study to be released this summer says Michel. Europe must coordinate its efforts to ensure that each euro spent goes to development and not washed up on a sandy beach on some elaborate resort.
In the meantime, Brussels is planning to frontload and refocus existing commitments on the most vulnerable in a rapid response scheme. This means over €4 billion should go to those countries the most affected immediately until the end of 2009 with the aim of counter-acting falling export revenues.
It is hoped that the conjoined efforts of Brussels’s development aid initiatives and trade policies will shore up African economies and slow the loss of jobs on the continent. The idea then is not to throw more money at the problem but to better coordinate among donors and rules for more effective results.
However, these propositions have left many skeptical, especially NGOs like Oxfam who see it as more rhetoric.
