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SOLIDARITY AND PARTNERSHIP
THE LOMÉ CONVENTION
AND
BUILDING A CITIZENS' EUROPE
POSITION PAPER PREPARED
BY THE COCIS NGOS
Working group coordinator: Mario Paolini
FEBRUARY 1999
COCIS gratefully acknowledges
the financial contribution of
the Ministry of Foreign Affairs of the Italian Government and
the European Commission
Introduction
The fourth Lomé Convention will expire in February
2000, and the negotiations that have been taking place since
30 September 1998 between the European Union and the 71 signatory
countries in Africa, the Caribbean and the Pacific (ACP) will
lay the basis of the future development cooperation agreement.
In many ways, since its inception in 1975 the Lomé Convention
has been a unique and advanced model for cooperation, based on
the principles of partnership, joint decision-making and contractual
agreement and combining financial and technical cooperation with
trade and political cooperation. Social and human development
has represented one of the key aims of the Convention, and respect
for human rights and democratic principles were included in the
frame of reference for its agreements.
While on the one hand the Convention's general approach may still
be considered valid, on the other, the limited scope of its results
and the problems that have beset its implementation are obvious.
In addition, the geopolitical transformations that have taken
place in Europe and in the ACP countries, against the background
of the far-reaching changes that have redrawn the political and
economic map of the world in recent years, now present new challenges
to European cooperation with the countries in the South of the
world.
For precisely these reasons, Italian NGOs believe that the new
agreement between the EU and the ACP countries must be capable
of overcoming the limits of the past and, at the same time, of
responding to the challenges posed by the new world order, by
drawing up a framework for policies that in practical terms pursue
aims such as eliminating the causes of poverty, social and human
development, removing gender inequality and promoting human rights
and a sustainable environment. The future ACP-EU agreement must
be even more clearly a partnership between the different civil
societies involved, recognising the decisive role of citizens
and the organisations representing them as protagonists in development
processes. It is our view that the framework for cooperation
between the EU and the ACP countries that emerges will be able
to act as an indicator of the will and ability of the EU to play
a leading role in drawing up world-wide development policies
for the new millennium, based on a new concept of international
solidarity.
Development NGOs throughout Europe are therefore mobilising to
bring the debate on the renewal of the Lomé Convention
out of the "semi-clandestine" circle of insiders and
to raise awareness in civil society and public opinion in general
in their countries about the content and implications of this
important cooperation agreement.
With the present paper, the COCIS aimed at stimulating a debate
among its member NGOs in order to decide on the themes and content
of a national campaign to raise awareness about the renewal of
the Lomé Convention. Furthermore, it proposed to use this
instrument to open a discussion with the other Italian NGOs in
order to prepare common information for public opinion and lobbying
of the media, political parties and the government.
Clear objectives
and coherent policies for European development policies
Up until the Maastricht Treaty, there was no legal basis for
development cooperation - in other words, there was no document
stipulating that the Community should be a "donor",
even though in actual fact areas of competence that are vital
to development policy (such as trade, for example) had already
been transferred to the Commission by the Member States. So it
is no accident that, over a thirty-year period, the EU's cooperation
policy evolved reactively and chaotically, without any clear
strategy and using a wide range of instruments which were not
always inter-related. The Maastricht Treaty thus marked a turning-point,
defining a clear mandate for EU cooperation and setting objectives
to be pursued and be accountable for to its citizens.
The principles enshrined in the Treaty bind the EU to a better
coordinated and more coherent development cooperation policy:
_ coherence between the EU's various policies and those of member
states so as to support - or at least not damage - European development
objectives;
_ complementarity between the EU's development policies and those
of member states, and between the various instruments used, in
order to avoid overlapping and to build on each other's respective
strong points;
_ coordination both between and within the EU and Member States,
in order to ensure coherence between European development policies.
The general aims of the EU's development cooperation are clearly
set out in Article 130 (u):
_ sustainable economic and social development in developing countries,
especially the most disadvantaged ones;
_ a smooth, gradual integration of developing countries into
the world economy;
_ a campaign against poverty in developing countries;
_ the promotion of democracy and the rule of law, and respect
for human rights and fundamental freedoms.
In addition, the EU and its member states are signatories
to a series of major declarations and action plans adopted by
various United Nations conferences on development. The aims of
these conferences were endorsed by the members of the OECD's
Development Aid Committee in the paper entitled Shaping the 21st
Century: the Contribution of Development Cooperation. These are:
_ economic well-being: the percentage of the population living
in extreme poverty in developing countries must be reduced by
at least half by the year 2015;
_ social development: primary education for all by 2015, the
elimination of gender inequalities in primary education by 2005,
a two-thirds reduction in the infant mortality rate by 2015,
a three-quarters reduction in the mortality rate of women in
childbirth by 2015, and access for everyone to basic health care
and reproductive health by 2015;
_ environmental sustainability and regeneration: every country
must draw up a national strategy for sustainable development
by 2015.
All too often in the past, these development principles and
objectives have been flouted and trampled on. Behind the declarations,
there has been no concrete, consistent commitment on the part
of the industrialised countries to eliminate the causes of poverty
and North-South imbalances or to establish economic and social
development characterised by equity and sustainability. Intervention
patterns in development cooperation all too often give way to
economic and political interests, and end up helping to consolidate
inequality and injustice and increase poverty. Nor have the development
cooperation policies of the EU and its member states have always
been consistent with these high-sounding principles and ambitious
aims.
The experience
of the Lomé Convention and the new challenges
On paper, the Lomé Convention has some unique features
not found in other development cooperation agreements. The most
original and distinctive aspect of the Convention is that it
has been negotiated and ratified by both donor and beneficiary
countries in a partnership framework. The contractual relationship
between the two groups of countries is marked by a political
dialogue based on parity and reciprocal sovereignty. The link
between aid and trade measures, as coordinated instruments of
development cooperation, represents another distinguishing feature.
Furthermore, the fact that financial commitments are programmable
and foreseeable helps encourage sustainable development strategies
in the beneficiary countries over the long term.
The key objective set by the fourth Lomé Convention is
to support the ACP countries' 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 their dignity".
An appraisal of the results, compared with the intention, cannot
but be a negative one, calling into question the Convention's
effectiveness and relevance. North-South dialogue has often been
replaced by a monologue delivered by the EU to the ACP countries.
Over time, the paternalistic and colonialist culture that has
informed the relationship between the partners from the start
has been given concrete expression in an increasingly marked
centralisation of decision-making on the part of the EU, on the
one hand, and by the purely formal participation - at best, consultative
participation - by the ACP countries, on the other. Down through
the years, the EU's increasingly pressing requirement of efficiency,
in the face of poor management capacity on the part of the ACP
countries, has found expression in a heightened tendency towards
interventionism, with growing EU influence on development programmes
and policies in the beneficiary countries.
The financial and commercial cooperation instruments put in place
by the Lomé Convention have had no significant effect
on economic growth, reducing poverty, curbing social inequality
or removing the causes of conflict. The growing marginalisation
of almost all ACP countries in trade or international investment
flows is strikingly obvious, as is their increased economic and
financial dependence. In many ACP countries, especially in Africa,
human development indicators remain at minimum levels. Even the
situation with food security has not shown the hoped-for improvements:
in many cases this remains extremely serious, or has even got
worse. Political instability and internal and international armed
conflicts are still causing suffering and destruction in many
ACP countries.
The failures just described of 25 years' experience of the Lomé
Convention highlight the degree of ambiguity in the relationship
that has been established between Europe and its former colonies
in the context of the Convention: a model of partnership and
North-South cooperation - in principle exemplary - which has
not been followed up by coherent action in trade and aid policies,
and which has thus been partly transformed into an instrument
for the North's control of the South, giving precedence to the
economic and political interests of the strongest partner.
Despite this, we believe that the Lomé model, renewed
and improved, can still offer an alternative to the dominant
neo-liberal approach to development problems. To do so, the future
EU-ACP agreement must be capable of taking up this challenge
on a variety of levels: putting forward coherent development
strategies drawn up in a democratic and participatory framework;
affirming the principles of peace, security and international
solidarity; subscribing to the idea that there are economic,
social and environmental areas that cannot be regulated by the
laws of the market; affirming a renewed North-South partnership,
based on common interests shared by all the civil societies involved.
Nevertheless, a range of factors is placing serious obstacles
in the way of recasting and relaunching the Lomé model.
The processes of economic and financial globalisation impose
models for international economic relations based on the liberalisation
of trade and investment, and the rules of the World Trade Organisation
(WTO) reduce to almost nothing the political space left for trade
relations that are not based on multilateralism. At this stage,
in fact, the main problem for the EU seems to be getting the
future agreement to conform to WTO rules.
The crisis in development aid policies, squeezed between control
of the public deficit and the crisis in welfare, has resulted
in a substantial reduction in the resources available for international
cooperation worldwide. In Europe, the budgets of the individual
member states are under pressure to meet the "Maastricht
convergence criteria", so that even the EU's budget is subject
to greater constraints, with unfavourable effects on appropriation
decisions for Community development aid (which dropped from ECU
6,843 million in 1994 to ECU 6,057 million in 1997).
In addition, one effect of redefining the European Union's geo-strategic
priorities has been a different geographical distribution of
aid. In the EU's common foreign policy, in fact, priority is
given to security-related concerns and, in more general terms,
economic and strategic considerations, to the detriment of the
aims of development cooperation in the strict sense. In this
situation, the privileged position of the ACP countries has grown
gradually weaker, primarily to the benefit of the countries in
the southern Mediterranean, then those in Asia and Latin America,
and finally the Central and Eastern European Countries (CEECs).
In the Mediterranean Basin, the EU's interest in stability and
in controlling the flow of migrants has led to a tripling of
its financial involvement since 1991. Asia and Latin America
are still a low priority, but humanitarian motives and economic
and strategic interests are leading to a gradual extension of
EU involvement there. Thanks to the plan to enlarge the EU eastwards,
the CEECs are becoming a privileged partner in dialogue, benefiting
from enormous amounts of aid to reform their economies. Cooperation,
which was once based on ex-colonial links, cold-war patronage
systems or solidarity, is now in danger of being more and more
driven by "internal" aims.
Once again, therefore, the redefining of the EU's political,
economic and strategic aims in the international arena is raising
the issue of the relationship between development cooperation
and foreign policy: autonomy for development policies can lead
to their being marginalised, while integration can bring with
it the risk of subordination. A third way, and the one recommended
and practised by NGOs, is that of a comprehensive foreign policy
open to the world, within which policies for development and
cooperation with Southern countries constitute a vital, qualifying
dimension.
As the world's main donor and main trading block, the EU is in
a position to tackle these challenges and play a leading role
in defining the new approach to international solidarity and
development cooperation. The new EU-ACP agreement must live up
to the principles and aims the EU has set itself. This, however,
requires the political will to make coherent and courageous choices,
if these principles and aims are not to remain merely the subject
of a purely formal and abstract universal consensus, but are
instead to be translated into practical intervention designed
to make a real improvement in people's material and spiritual
living conditions, promoting access for them to economic resources,
respect for fundamental human rights and the power to choose
their own form of development.
Unfortunately, in the negotiations currently under way on the
renewal of the Lomé Convention, some elements are emerging
that strongly contradict the declared principles. Some proposals
in particular, in the approaches and operational mechanisms they
outline, give cause for concern as they run completely counter
to the development aims unanimously shared on paper.
Participation
by civil society
Historically, the EU-ACP partnership was built mainly on the
relationships between governments, thus excluding to a large
extent non-governmental and civil society actors.
The importance of participation by civil society as a key element
in promoting more effective development cooperation and ensuring
greater transparency in decision-making mechanisms was explicitly
recognised in Lomé IV-bis. This good intention too, however,
got no further than the paper it was written on, thus failing
to enhance the quality of the EU-ACP partnership through an increased
role of civil society.
Unfortunately, it must be noted how, beyond declarations of principle,
even in the EU and ACP's negotiating mandates for the current
discussions the role of civil society is not appreciated at its
full value. In the ACP mandate it is hardly mentioned, while
the reference to civil society in the EU mandate fails to list
concrete participation mechanisms for it. In crucial areas such
as economic and trade cooperation, there is no room for civil
society, except perhaps as "the private sector" (as
if these areas should be the exclusive preserve of the "experts").
Italian NGOs feel that a renewed concept of partnership - one
that hinges on the relationship between civil society North and
South - should lie at the heart of the new Lomé Convention.
The role of civil society should be recognised in all spheres
of cooperation, not just formally, but reinforced with adequate
instruments and resources designed to increase the capacity of
the various agents to intervene in development processes. In
particular, space should be given to organised groupings in civil
society (rural and urban grassroots organisations, socially-oriented
cooperatives and firms, trade unions, non-governmental development
organisations, fair trade associations, etc.) that are committed,
in their day-to-day work, both in the North and in the South,
to reaching those aims of sustainable human development that
were formally adopted by the Lomé Convention (see above).
Extending the political dialogue between ACP and EU countries
must be reflected in an open, transparent process of drafting
and implementing the future agreement in which civil society
can participate fully. The new Convention must give priority
to creating a mechanism that makes full participation by representatives
of civil society possible, both in the EU and ACP countries,
in defining the instruments for development cooperation and the
procedures for using them. Effective participation by civil society,
both at the drafting and implementation phases of the new Lomé
Convention, can be ensured by inserting a declaration on freedom
of association into the preamble to the new agreement; by involvement
in all phases of national and regional indicative programmes;
and by participation at all levels of the decision-making process:
local, national, regional and ACP-EU.
There is a need to adopt a policy of openness to civil society
to encourage information on the development programmes supported
by the Convention as well as active participation in designing
and implementing them. One instrument for increasing the amount
of information and transparency could be an annual report on
progress made with implementing the agreement, published both
by the European Commission and the individual ACP countries.
In addition, in the new Lomé Convention an independent
institution should be envisaged, where individuals and communities
who are negatively affected by programmes carried out under the
agreement can have the opportunity to complain and to benefit
from corrective measures and compensation for the damage they
have suffered. This complaint mechanism should also be extended
to cover consequences that are not directly linked to the implementation
of the agreement, but stem from other EU policies that are not
coherent with it.
Human rights
and democracy
A recognition of the indivisibility of civil and political
rights on the one hand, and social, economic and cultural rights
on the other, together with the so-called "third generation"
rights such as those connected with a healthy environment, inextricably
links the issue of human rights to that of development. The right
to education, medical care and healthy food are fundamental human
rights, as are the rights of women and workers. There can be
no policy of safeguarding and promoting rights that does not
take on board the economic, social, political and environmental
context and the durability and sustainability of every right
acquired. Promoting human development thus necessarily involves
asserting the human rights of those citizens who are excluded
from it.
Relatively recently, the connection between development policies
and the promotion of human rights and democracy became one of
the distinguishing elements of the EU's policy of cooperation
with developing countries. The question of human rights was explicitly
introduced for the first time in Lomé III (1986) and,
with the mid-term review of Lomé IV (1995), the link between
development cooperation and safeguarding human rights was further
strengthened. Human rights, democracy, the rule of law and good
governance are included among the vital elements regulating the
EU's development cooperation policy. Within this framework, political
dialogue and cooperation are seen as an instrument for encouraging
functional conditions for setting up systems in the developing
countries that guarantee political pluralism and the protection
of human rights, as well as transparent institutions within its
own administration. In the negotiations on the renewal of the
Lomé Convention, the European Union seems to be setting
itself, explicitly, the aim of a partnership that is also geared
towards democratising the ACP countries.
The principle of democracy as a condition allows the EU to take
sanctions against countries responsible for violations, through
the clause that provides for a suspension of the cooperation
agreement. Even though a consultation body is envisaged, to look
into cases of violations, the final decision on sanctions is
taken unilaterally by the EU. The ACP countries, although accepting
the provisions on human rights and democracy, have voiced their
concern about the criteria for verifying violations and applying
punitive measures, and about the "conditionality" mechanism
itself. The danger that these conditions could be used as a means
of exerting political pressure is obvious.
Aside from the basic problem of the lack of a universally valid
definition of democracy and clear systems for evaluating how
democratic systems are operating, the principle of democracy
as a condition raises the question of the concepts of sovereignty
and joint responsibility, which are the very basis of the partnership.
Making aid programmes subject to conditions of a political nature
is likely to undermine the sovereignty of individual countries,
raising once again, in the context of the Lomé Convention,
the question of the conflict between national sovereignty, on
the one hand, and safeguarding human rights and democratic principles,
on the other. Furthermore, even though in general the EU stresses
the need to substitute the concept of "conditionality"
in the new agreement with that of a "contract" based
on mutual obligations, in practice the power relationship between
the contracting parties remains very uneven, which make real
joint responsibility in the relationship impossible. There can
be no joint responsibility if just one of the partners is in
the dominant position of being able to judge the level of democracy
in another and penalise it accordingly. Clearly, the solution
to this problem must lie outside the framework of the Lomé
Convention, in a more wide-ranging response to the problem of
international safeguards for human rights and democracy.
The position of Italian NGOs is that the future agreement between
the EU and ACP states should stipulate approaches and measures
to strengthen the relationship between development policies and
the promotion of human rights and democratic principles:
_ The EU must strengthen the coherence between positions of
principle and intervention policies that reflect an acknowledgement
of the indissolubility of economic, social and cultural rights
from political, civil and environmental ones, and their dependence
on the overall macro-economic and political situation, in concrete
forms of intervention that have human development as their aim.
_ Support for consolidating democratic processes in the ACP
countries must recognise the central role of civil society participants
and decentralised cooperation programmes.
_ The move from political conditions to contract must provide
for mutual obligations and effective respect for the principles
of sovereignty and joint responsibility. In particular, the verification
of violations of human rights, in both ACP and EU countries,
must be entrusted to an outside body which is independent of
the Convention, following the model of the newly created International
Criminal Court or as has been proposed for the reform of the
World Bank, while in some specific cases the system of sanctions
for partners who are judged to have transgressed, on the basis
of a report from this outside body, should remain an internal
one.
_ Any sanctions that may be taken must distinguish between the
governments responsible for violations and the civilian population
that is subjected to them, and must therefore provide for the
continuation of cooperation activities aimed at safeguarding
human rights in the context of human development.
Financial
cooperation and development aid
Up to now, financial assistance from the EU for development
in the ACP countries has been of a contractual nature, in a partnership
based formally on the principles of equality and sovereignty.
Sovereignty, however, and the right of each country to choose
its own political and economic system, involves constraints in
terms of respect for human rights and democratic principles.
Besides these political conditions, with a view to increasing
its capacity to monitor and punish any improper use of its funds,
the EU has introduced more stringent conditions based on the
performance of beneficiary countries. It proposes to strengthen
these even further in the future, partly with a view to gradually
replacing the financing of individual projects with direct support
for government budgets. In this situation, the problem with conditions
being attached to aid emerges in all its ambiguity. While one
may agree in principle with conditions being imposed on beneficiary
countries in relation to respect for human rights and democratic
principles and the efficient use of resources, there are lingering
doubts about the possible use of this aid as an instrument for
exerting political pressure, in the absence of criteria and procedures
for verifying jointly whether these crucial contractual aspects
have been violated.
The majority of funds for technical and financial cooperation
with the ACP countries are supplied out of the European Development
Fund (EDF), while the remainder come through soft loans from
the European Investment Bank (EIB). The EDF is financed from
outside the Community budget by voluntary contributions from
member states that, in the course of each series of Convention
negotiations, give a legally binding undertaking to allocate
an overall amount to the Fund. The resources supplied by the
EDF are used to finance the National and Regional Indicative
Programmes, the STABEX and SYSMIN stabilisation funds, support
for structural adjustment, emergency relief and aid to refugees,
regional cooperation and subsidies on interest rates. The allocation
of funds is decided on by the EDF Committee voting with a qualified
majority, in which a country's voting power is proportional to
its contribution. It should be mentioned, however, that through
this institutional mechanism the process can be strongly influenced
by the bilateral interests of the countries with the greatest
financial capacity, to the detriment of a unified EU-wide cooperation
policy.
The partnership principle is the formal basis for the management
of the Lomé funds. For example, the ACP countries are
responsible for choosing their development strategies - in consultation
with the European Commission - through the National Indicative
Programmes (NIPs), and management is regulated by a sharing of
roles and powers between the EU and each individual country.
In theory, this programming is an important instrument for ensuring
the "ownership" of the aid programmes by the countries
benefiting from the aid, and their sustainability. In practice,
however, managing the Lomé funds has proven to be "procedural
nightmare": the huge number and the complexity of the instruments
has led to growing management difficulties both in the beneficiary
countries and the Commission. Many ACP countries do not have
sufficient management capacity (not to mention the problem of
corruption and the improper use of aid), and the control exercised
by the EU is too bureaucratic.
Resources for development cooperation with the ACP countries
have been reduced considerably over the years, both in real terms
and by comparison with other geographical regions. Considering
the increase in the number of countries signing the Convention
(from 46 to 71) and in the number of EU member states, the amount
of resources allocated overall to the ACP countries appears very
limited indeed.
Since the early 1990s, the geographical distribution of aid to
developing countries has shifted - to the detriment of the ACP
countries - as a result of the transformations in the economic
and political-cum-strategic world map which have led the EU and
its member states to redefine their priorities. Development policies,
like trade policies, have developed in a way that has provoked
a gradual erosion of the privileged position of the ACP group:
between 1987 and 1995 their share of total EU aid dropped sharply,
from 62.8% to 41.5%, mainly to the advantage of the countries
of Central and Eastern Europe and the former Soviet Union, and
to a lesser extent the countries of the Mediterranean Basin and
Latin America. At present, per capita aid to Eastern European
countries is six times higher than that to the ACP countries.
Trends in the extent to which the resources made available through
the EDF are actually used cause particular concern about the
EU's real commitment to maintaining a level of financing commensurate
with the aims it has set. From the first Convention onwards,
there has been a gradual, continual widening of the gap between
the resources earmarked and their actual disbursement. Funds
from the 6th EDF, which financed Lomé III (expired in
February 1990), are still being spent - in other words, it is
taking 13 years to use up funds that were supposed to be spent
in five. The 8th EDF (1995-2000) became operational only in June
1998, thanks to the EU member states' slowness in approving it,
and the Commission has already made it known that payments will
not begin before 2002. The causes of these delays may undoubtedly
be attributed to the complexity of the procedures involved, combined
with a high degree of inefficiency in the system for managing
Community resources, even at a decentralised level. Nevertheless,
a lurking suspicion may subsist that behind these problems in
disbursing the aid there lies a political desire effectively
to reduce the overall amount of the donations, by accumulating
unspent funds and using them as donations in subsequent EDFs
("rolling forward") or as an instrument for reducing
debt, as proposed in the EU's negotiating mandate. Italian NGOs
urge MEPs to do their utmost to get the EU to clarify these aspects,
by means of parliamentary questions.
A new EDF will be negotiated in the autumn of 1999, while before
that, in March, the EU will discuss its next seven-year budget
("Financial Perspectives for 2000-2006"). As there
is fierce competition on the allocation of limited resources
at member states level, there is a danger that commitments on
appropriations for development cooperation in the budget might
have a negative influence on the amount that will be allocated
to the EDF by the individual countries, as already happened with
the 8th EDF. It is therefore important for the requirements of
the ACP countries to be taken into consideration when the budget
is being discussed. The inclusion of the EDF in the EU budget
- as requested by the European Parliament - could promote greater
transparency and better control of spending, but in any case
the needs of the ACP countries should be duly taken into account.
In this regard, the position of Italian NGOs is that improving
the quality and effectiveness of the EU's cooperation programmes
has to entail certain measures that must be central to the next
agreement with the ACP countries:
_ the adoption - as specific objectives of the new Convention
- of the commitments made within the framework of the United
Nations Conferences and endorsed by the OECD's Development Aid
Committee (see above);
_ financial commitments adequate for attaining the above-mentioned
development objectives, both by the Commission (excluding the
"recycling" of unspent funds from previous EDFs) and
by member states (so that they finally respect their commitment
to 0.7% of GDP, which has apparently been "forgotten"
by most of the developed countries);
_ the adoption of a gender-aware approach in all aspects of
the future agreement (mainstreaming) and programmes specifically
designed to support the empowerment of women;
_ a commitment to increase investment in the sector of basic
social services (health, education, nutrition, drinking-water,
etc.) to at least 20% of development aid and 20% of the budget
of the beneficiary country, in line with the recommendations
from the 1995 Summit on Social Development (20:20 compact);
_ support for income-generating activities for the poor in rural
and urban areas (micro-credits, training, technical and marketing
assistance) and for systems in the local economy;
_ investment in agricultural production and agri-business, and
in food security systems (based on the development of traditional
crops), combined with agrarian reform measures;
_ strengthening civil society organisations so as to increase
their capacity to influence political decisions and ensure respect
for social and economic rights through access to resources;
_ stepping up financial support for NGO programmes and decentralised
cooperation activities;
_ a review of the criteria and mechanisms for allocating and
managing funds with a view to increasing flexibility, coherence
and transparency;
_ increasing the capacity to translate financial commitments
into spending within definite periods by simplifying the procedures
for disbursing the funds, and decentralising the functions of
the EU Delegation in this regard;
_ the gradual elimination of tied aid;
_ selecting areas and procedures for the joint solution of disputes
connected with the imposition of conditions.
Support for
structural adjustment
Starting with Lomé IV, which introduced measures to
support structural adjustment, a large proportion of the financial
aid allocated to the ACP countries (around 30%) has been used
for this purpose. The EU gives support to adjustment in the form
of donations rather than loans, unlike the World Bank or the
International Monetary Fund (IMF).
In principle, the EU's approach to structural adjustment differs
from that of the IMF and the World Bank on at least five major
points:
a) greater autonomy for the ACP countries in determining the
objectives and instruments for their economic policies and greater
emphasis on their "ownership" of the adjustment programmes;
b) more flexible approach to conditionality;
c) less stress on market liberalisation, currency devaluation
and privatisation;
d) from the programming phase onwards, greater attention paid
to the adjustment policies' social impact, especially on poverty;
e) greater attention to the regional dimension, thereby preventing
conflicts between the individual adjustment programmes.
In reality, however, the EU has remained essentially under the
sway of the dominant neo-liberal approach upheld by the Bretton
Woods institutions. The EU's approach does have a "human
face", but it basically remains confined to limitation of
damages caused by the World Bank and the IMF's programmes - structural
adjustment policy continues to be decided on in Washington.
Recent evaluations have once again highlighted the controversial
- if not downright disastrous - results of the neo-liberal type
of structural adjustment programmes. In particular, they show
the appalling effects on the living conditions of the poorest
sectors of society. Furthermore, the recent events in the Asian
crisis cast even greater doubt on the validity of the IMF and
World Bank's economic recipes. These facts have forced the latter
to be more self-critical, as well as re-launched the international
debate on both structural adjustment and the reform of these
two institutions.
In the opinion of Italian NGOs, the EU would be in a good position
to emerge from its subordinate status and relaunch its own approach,
which has so far got no further than the paper it is written
on. It should therefore use its political weight in the Bretton
Woods institutions to effect a change of direction in the adjustment
policies imposed on developing countries. This course is dictated
by the vital importance of defending the principles and objectives
on which the Lomé Convention is based. Indeed, without
resolute action to this end, the development cooperation model
built by the EU and the ACP countries will always run the risk
of being heavily influenced - or even frustrated - when it comes
to actual processes of structural adjustment over which neither
the EU nor the ACP countries have any control.
Trade agreements,
free trade areas and regional integration
Up to now, trade relations between Europe and the ACP countries
within the framework of the Lomé Convention have been
based on a non-reciprocal system of preferences, which has been
an important and original element in the EU's policy on cooperation
with the ACP countries. In theory, the aim of this system of
preferences was to support the ACP countries' exports and promote
their gradual integration into the world economy, creating favourable
conditions for development through the gradual transformation
of their economic structure.
This system granted preferential treatment to the ACP countries
by comparison with other developing countries. It provided for
access to EU markets for almost all their products, which were
exempt from customs duties and subject to no quantitative restrictions,
while they did not have to give the same treatment to EU exports
to their countries. Further support for ACP countries' exports
came from stabilisation and price support mechanisms for basic
products (STABEX) and mineral products (SYSMIN), and from commercial
protocols that provided for guaranteed access to certain products
on a quota basis (rum, sugar, bananas and beef) and - in the
case of sugar only - a guaranteed price. The principle of free
and unrestricted access to the EU market has been considerably
limited, however, by the protectionist provisions of the Common
Agricultural Policy (CAP), by the rules on determining the origin
of the goods, and by the safeguard clauses.
Lomé's trade preferences have benefited the ACP countries
very unevenly, depending on the level of development of their
productive systems and the composition of their exports. While
some countries (e.g., Mauritius) have managed to profit from
favourable conditions in its trading relations with the EU in
order to develop competitive and diversified economies, the general
picture, however, is one of quite depressing results. The amount
of ACP exports to the EU has diminished constantly over the past
20 years, dropping from 6.7% in 1976 to 3.7% in 1992, in line
with a trend to marginalise these countries in world trade (2%
of the total in 1997). The products exported have remained mainly
primary products with low added value, demonstrating the failure
to achieve the aim of diversifying their economies. In general,
it can be said that EU-ACP trade has continued to borrow from
a colonial model - raw materials in exchange for European manufactured
goods. The main cause of the ACP countries' failure to become
integrated into the world economy can be pinpointed first and
foremost in the unequal system of exchanges and the structural
imbalances in North-South relationships, which the EU too has
helped to consolidate, with its policies designed to defend its
own economic and political interests.
In the current negotiations, the EU is proposing a radical change
from its previous approach, towards a non-discriminatory system
of reciprocal preferences, in compliance with the neo-liberal
rules of the World Trade Organisation (WTO). The key element
in the EU proposal is the creation of Free Trade Areas (FTAs)
between the EU and the ACP countries grouped according to region,
for a transition period of ten years, starting in 2005. For countries
that do not wish to - or that cannot - become party to these
regional agreements, there are two different options. The less
developed ACP countries can continue with non-reciprocal, duty-free
conditions of access to EU markets for basically all products,
as provided in the WTO regulations. The other ACP countries,
on the other hand, will receive the same treatment as other developing
countries within a Generalised System of Preferences (GSP), less
favourable than the Lomé preferential regime and managed
unilaterally by the EU (and thus outside of a partnership framework).
The various commercial protocols will cease to exist in their
present form, and STABEX and SYSMIN are due to be scrapped.
Problems of various kinds make the EU proposal to liberalise
trade and create regional FTAs unacceptable in its present form,
as it is unrealistic and in complete contradiction with the declared
aims of sustainable economic and social development and the fight
against poverty:
_ Regional integration among the ACP countries is still at levels
that are inadequate for laying the basis for a free trade agreement.
No ACP region (except perhaps the Caribbean) has the political
and institutional conditions necessary for drawing up common
trade policies. Furthermore, the less developed countries, which
can continue to enjoy non-reciprocal conditions, might not have
any incentive to subscribe to these regional agreements. Regional
integration processes may be facilitated, but not imposed from
outside.
_ The different levels of development in the countries involved
in the free trade agreements will lead to an unequal distribution
of costs and benefits to the disadvantage of the more developed
countries. There is an enormous disparity between the per capita
GDP in EU and ACP countries (280:1 between the richest EU and
poorest ACP country), but even between countries in the same
region there are significant differences (e.g., between the richest
and poorest country in the SADC, the regional economic organisation
in southern Africa, the ratio is 38:1).
_ The ACP economies have not developed sufficiently to be able
to withstand competition from EU duty-free imports. The structural
constraints within the ACP economies (infrastructure, information,
access to credit, etc.) restrict their capacity to react to competition
from the EU. The fragile industrial development in the ACP countries
could be seriously compromised, leading to de-industrialisation
and unemployment.
_ The agricultural sector in the ACP countries, which supports
on average 70% of the population, will be severely hit by the
unfair competition from EU agricultural produce subsidised from
the CAP, resulting in serious economic damage and grave risks
to food security and the environment.
_ On average, over 20% of the ACP countries' fiscal revenues
comes from import duties. The reduction in these revenues caused
by the liberalisation of international trade will lead to serious
problems for public finances, ultimately limiting the resources
available for development programmes in the social sectors (education,
health, etc.).
_ Regional free trade agreements are likely to create a "trade
diversion", if cheaper goods imported from third countries
are replaced by dearer goods of EU origin as a result of the
lack of duty on the latter. In this case, the regional agreements
could reinforce the ACP countries' dependence on the EU, to the
detriment of more advantageous links with other dynamic economies.
The results of the studies on the economic impact of regional
free trade areas, recently commissioned by the EU, are not favourable
for the majority of countries and confirm the problems and risks
entailed by the measures proposed.
Italian NGOs therefore feel that any future agreement on trade
relations between the EU and the ACP countries must take these
problematic issues into account and propose solutions that do
not produce negative effects on the economies of the ACP countries
and the living conditions and incomes of their people, but rather
adhere to the basic aim of improving their potential for sustainable
and equitable development. Future trade relations should therefore
be based on maintaining the present conditions of access for
ACP countries to the EU market, while the elimination of duties
on imports of EU products should not weaken ACP production for
national and regional markets. The basic reference for trade
policies should be the development needs of the countries involved
and those of their populations, and not the liberalisation of
the market as an end in itself. There is ample evidence to show
that the liberalisation of international markets does not necessarily
lead to economic growth in developing countries, still less to
equitable, sustainable development.
For these reasons, a gradual changeover to a regime of reciprocity
in EU-ACP trade should be subordinated to the creation of conditions
ensuring that this can become a positive force for economic and
social development in the ACP countries. With this in mind, it
seems to us that it would be crucial for the EU to take the following
steps:
_ to back development work aimed at eliminating supply-side
constraints that are preventing ACP producers from competing
effectively with EU producers (the development of human resources,
infrastructure, transfer of appropriate technology, access for
the most socially disadvantaged groups to economic resources);
_ to remove distortions in the Common Agricultural Policy by
radically reforming it, thereby allowing the comparative advantage
of the ACP countries to be fully exploited;
_ to support the creation of the institutional conditions necessary
for turning the negotiation of regional agreements into a realistic
option;
_ to encourage tax reform in the ACP countries in order to reduce
the dependence of their public finances on customs duties;
_ to extend existing preferential tariffs likely to produce
benefits for ACP producers to those sectors where no negative
repercussions for EU production can be shown;
_ to use limited health and phytosanitary regulations, solely
as dictated by the need to protect consumer health and not as
artificial non-tariff barriers to imports from ACP countries;
_ to simplify and update the rules on the origin of goods;
_ to introduce special provisions to meet the needs of the less
developed and most vulnerable countries (small islands, countries
that depend on the production of just one item, etc.);
_ to support and promote fair trade, through support for both
production in the ACP countries and distribution in the EU;
_ to alter the EU's internal regulations that arbitrarily damage
both the interests of producers in the ACP countries and those
of EU consumers (cf. the chocolate issue).
Only when these conditions are in place will the individual
ACP countries and regional groupings of countries be in a position
to decide voluntarily to transform the present, non-reciprocal
trade agreements with the EU into accords based on reciprocity.
The ACP countries will need to be given enough time to adapt
to the new conditions. During this transition phase, there should
be constant checks on the impact of the introduction of the new
trade agreements at economic level (economic growth, terms of
trade, redistributive effects, etc.), as well as at social (human
development, gender relations, etc.) and environmental level.
Necessary corrective action should be undertaken to minimise
the costs and maximise the benefits for the weaker partners and,
if necessary, readjusting the time allowed for transition. Specific
impact studies and grievance mechanisms, made available to sectors
in civil society negatively affected by the introduction of the
new trading system, can be the instruments for carrying out these
checks.
The rigid neo-liberal rules of the WTO can be revised and brought
into line with the actual situation that exists with the trade
agreements between developed and developing countries. Given
the balance of power in the WTO assembly, a joint EU-ACP initiative
on this could be successful.
In view of the evidence that market globalisation and liberalisation
do not automatically lead to an eradication of the causes of
poverty and inequality - and indeed in many cases actually aggravate
the problems - a new EU-ACP agreement on trade cooperation must
be concluded within the framework of a cooperation strategy that
centres on human and social development.
Investment
and technology transfer
Investment is vitally important for economic growth and job
creation in the ACP countries, as in all developing countries.
Most of the ACP countries, however, do not offer favourable conditions
for investment (political stability, macro-economic context,
infrastructure, etc.). Their internal investment capacity remains
limited by the lack of entrepreneurship, a low level of savings
and lack of management and technical capacity.
In addition, the enormous expansion of direct foreign investment
at world level in recent years has been very unevenly distributed,
and has largely excluded the poorest countries - around 90% of
investment flows were directed towards the EU, Japan and the
USA, while investment in developing countries has been concentrated
in the few countries with the greatest power to attract it. Only
1.1% of the total investment flow to developing countries in
1995 went to the least developed countries, which are strongly
represented in the ACP group.
There is fierce competition among developing countries to attract
inward investment, and in many cases this has given rise to policies
that are extremely favourable to multinationals (including freedom
to pollute and the repression of trade unions and movements of
indigenous peoples). This may have stimulated economic growth
in a few countries, but to say the least it has had a debatable,
if not negative, effect on human development and the environment.
Crucial aspects to do with investments are an integral part of
the negotiations currently under way. The EU is inviting the
ACP countries to commit themselves to promoting and protecting
private investment by applying the WTO's multilateral agreements:
protection for intellectual, industrial and commercial property
through the application of the treaty on intellectual property
(TRIPs); the promotion of policies on free competition; the protection
and promotion of investment through the application of the treaty
on investment measures (TRIMs); the right to set up firms on
the basis of the most-favoured nation clause; and the liberalisation
of current account transactions, of currency convertibility and
the repatriation of investments and the related profits. Although
some of these measures may encourage the creation of a favourable
environment for investment, overall, the EU's attitude reflects
the dangerously unbalanced approach - that favours the rights
of investors - proposed by the Multilateral Agreement on Investments
(MAI), which lies at the heart of semi-clandestine negotiations
within the OECD. In essence, the trend is to restrict drastically
the right of the governments concerned to regulate investment
in line with their priorities of human development and environmental
protection, supporting the development of local productive capacity
and technological resources, and financial stability. For example,
the rules on intellectual property protect the interests of the
multinationals, which own 90% of industrial patents, to the detriment
of the developing countries - which carry the burden of the growing
costs of transferring technology that is vital for increasing
productivity and international competitiveness.
On this matter, the opinion of Italian NGOs is that the protection
of the rights of investors is an important element in creating
a favourable environment, but that this must not mean absolute
freedom for multinational firms. Investors' rights must be balanced
by duties and responsibility - both to respect the rights of
workers, consumers and the communities affected and to protect
the environment. Although in general the EU does take on board
the concern for the rights of workers, human rights and the environment,
these ideas do not inform the proposal on investment.
Inward investment can bring potential benefits to developing
countries only if their governments retain the right to regulate
it and direct it towards the promotion of sustainable development
and the eradication of poverty. It should not be forgotten that
these same rights, which are today being attacked by the WTO
and the MAI (control of the repatriation of profits, local content
requirements, technology and training transfer, balance of payments
requirements, protection for infant industries, etc.) have -
together with active State intervention in the economy - laid
the foundation for the industrialisation and development of Asia's
emerging economies. The unrestricted liberalisation of investment,
of international trade and financial systems can spark off situations
of uncontrolled crisis - with disastrous consequences for the
weakest social groups, as recent experiences in Asia have shown.
For these reasons, it is the view of Italian NGOs that the future
EU-ACP agreement should tackle the issue of investments from
the perspective of actively promoting human and social development:
_ the new agreement should establish the bases for joint EU
and ACP action within the WTO to assert the right of developing
countries to regulate inward investment depending on their degree
of development and support for internal capacity, through reinvesting
profits, transferring technology and know-how, training, and
the requirements regarding both the content of local input and
a positive impact on the balance of payment - in particular,
joint EU-ACP action should aim at a review of the TRIPs and TRIMs;
_ the EU should provide the ACP countries with technical assistance
in setting up systems to regulate and monitor competition and
investment, to ensure that firms meet certain standards from
the technical, social and environmental points of view, including
tax standards and workers' rights in compliance with the social
clauses of the International Labour Organisation;
_ the new agreement should provide for the introduction of a
code of conduct for foreign activities by EU and ACP multinational
firms in relation to human rights, worker and consumer rights,
environmental protection, political interference and corruption;
_ the EU should assist the ACP countries with the direct transfer
of technology that promotes job creation, training and more efficient
public administration, and with programmes to transfer professional
and training skills in information technology.
Debt
Many low-income countries that are deeply in debt are in Sub-Saharan
Africa, and of the 41 countries classified as heavily indebted
poor countries (HIPCs) at the centre of the initiative led by
the World Bank and International Monetary Fund to reduce debt
to a "sustainable level", 35 belong to the ACP group.
The total foreign debt of the ACP countries increased more than
tenfold between 1975 and 1995, leaping from US$ 21.8 to 222.8
billion. The ratio between debt and GDP reached an average of
92% in 1995, but for the African countries in the group it was
154%. The total amount for debt servicing as compared with exports
averages at around 15%, but is as high as 21% for the African
countries.
It is estimated that about 25% of the total debt of the ACP countries
was contracted with the EU and its member states, involving amounts
of 15% (multilateral) and 85% (bilateral), respectively. While
at world level some member states (Germany, Britain, Italy and
France) are among the main bilateral creditors, the EU has a
relatively modest role as a multilateral creditor. The amount
owed to the EU is only 1% of the ACP countries' foreign debt.
Despite this, Italian NGOs consider that the EU could play a
leading role in the international initiative to reduce the debt,
sending out a strong political signal to the creditor countries
and the international financial institutions, by taking decisive
action to cancel the debt of the heavily indebted countries,
starting with provisions in favour of the ACP countries within
the framework of the renewal of the Lomé Convention.
There is, however, strong resistance to this. Back in 1990, the
proposal by the Commissioner for Development to cancel completely
the multilateral debts of the ACP countries was decisively rejected
by some member states and the EIB. In spite of this, some timid
steps have been taken to reduce the burden of the multilateral
debt on the ACP countries, cancelling outstanding STABEX debts
and constantly increasing the proportion of donations as opposed
to loans within the successive Lomé Conventions. Today,
the only loans are the financing administered by the EIB. Nevertheless,
payment of the debt accumulated under previous Conventions will
continue to weigh down the ACP countries until 2033, with a peak
in 2007 equivalent to ECU 80.8 million.
The intransigent position of certain member countries and the
EIB has caused problems even within the sphere of the HIPCs initiative,
where they reject the Commission's proposal to cancel the multilateral
debt. These same member countries have been reluctant to take
initiatives on bilateral debt, thereby slowing down what could
be timely and effective action to alleviate the debt.
This situation highlights the serious lack of coherence between
the policies of the EU and its member states: coherence between
the roles of donor and creditor, insofar as the burden of the
debt is limiting development possibilities, and coherence between
the policies of the Commission and those of the various member
countries. These contradictions must be overcome, and a debt
policy that fits in with the principles and objectives that the
EU has set itself, in terms of sustainable social development
and the fight against poverty, must be launched. In the framework
of the future agreement, the EU should offer the ACP countries
the full cancellation of the multilateral debt under Lomé
and should commit itself to push member states and the multilateral
institutions at least to adopt measures to alleviate the debt.
In this context, the proposal to use EDF resources to reduce
the debt is unacceptable.
Conflict
prevention and consolidating peace
Of the thirty or so armed conflicts currently being fought,
13 involve ACP countries. Ten other countries in the ACP group
have just emerged from wars or are suffering the consequences
of conflicts in neighbouring countries. In the areas concerned,
there are 33 million refugees or internally displaced people,
80% of whom are women and children. The human cost of these conflicts
in terms of death and suffering is enormous: entire regions are
destabilised and impoverished. The poorest people suffer from
further marginalisation and the loss of social protection, while
the warlords and profiteers make their profits from the general
impoverishment through the black market, extortion and contraband.
The origins of many conflicts in Southern countries often go
back to the colonial and post-colonial relationships of domination
and exploitation whose victims have been these countries and
their people. Behind the facile ethnic or religious explanations
for these conflicts lie harrowing economic and political contradictions
and power struggles whose sponsors - with their own interests
to promote - are to be found in the North of the world.
The position of Italian NGOs on this point is that the next EU-ACP
agreement must play a major role in preventing conflicts and
that the EU must commit itself to this by means of:
_ intervention policies that support democratisation processes,
different ethnic groups living together in harmony, and the rights
of minorities and organisations in civil society that are involved
in promoting and defending human rights;
_ development activities that work on the possible causes of
conflict;
_ monitoring and controlling the operations of EU firms (usually
mining and oil companies) that work in conflict areas;
_ pressure on member states both to apply the code of conduct
on arms control approved by EU heads of state in June 1998 and
to promote it at international level;
_ emergency humanitarian aid with a view to supporting peace-making
and economic and social rehabilitation.
Decentralised
cooperation
Decentralised cooperation was explicitly agreed for the first
time in the context of the Lomé Convention. With the review
of Lomé IV in 1995, in particular, the concept was enunciated
more specifically, recalling the importance of participation
by the people concerned, activities aimed at building individual
capacities and decentralisation. Nonetheless, despite these reminders,
cooperation projects continued to be viewed in the context of
centralised relationships between states. Indeed later on, when
the consistency of decentralised cooperation programmes under
Lomé was checked, only 5% of the resources of the 7th
EDF were found to be allocated to decentralised cooperation projects,
and if one looks specifically at the nature of the individual
projects one can see how - despite some undoubted elements of
decentralisation - intervention has to a large extent maintained
the traditional, centralised approach.
This situation has arisen thanks to the concomitant occurrence
of various factors. First and foremost, it is due to the very
nature of the Lomé Convention itself, which has a centralised
approach and accords a predominant role to the ACP states. Furthermore,
the EDF's procedures and management meet criteria that are too
rigid, complex and hierarchically-minded to be capable of adapting
to the innate elasticity of a decentralised, participatory programme
- which in practice makes funds inaccessible to non-government
participants. Another obstacle undoubtedly derives from the resistance
of the ACP states themselves, which are not always prepared to
back the autonomy of civil society entities, in terms not just
of policies but also of the resistance from and/or the inability
of governments to grant space for freedom. At most, decentralisation
affects the structures of the state itself, and there is still
a marked lack of openness towards non-governmental bodies. This
same inability at local level may also be noted on the part of
the European Union's territorial delegations, whose relations
with civil society still leave much to be desired, as they remain
too exclusively anchored in institutional-type relationships
(which do undoubtedly present fewer risks and uncertainties).
So in this matter too, a discrepancy may be observed between
the theoretical positions and policies adopted by the European
Union, which yet again fails to follow through on its own declarations
of principle. The position of Italian NGOs is that the new Lomé
agreement must include among its priorities the introduction
of spaces and practices that trigger participation mechanisms
and make the local population capable of managing their own change.
In this sense, it seems clear that participation must not be
regarded as merely an instrument, but rather as an end in itself.
EU-ACP cooperation must not just promote citizens' capacity to
participate, but must also encourage a more participatory approach
by institutions, so that mechanisms may be introduced to involve
the people in the process of overall development, at local, national
and international level.
The new agreement between the EU and the ACP countries must broaden
considerably the space for decentralised cooperation, as a vital
tool for expanding the role played by civil society in development
processes and for strengthening forms of partnership that are
based on collaboration and linkages between economic and social
actors, in both the South and the North. The sharing of knowledge
and exchange of experiences in development programmes can lay
the foundation for building a real partnership between different
players, based on common values and interests, focused on combating
the causes of poverty and social exclusion and the elimination
of imbalances between the North and South of the world. Besides
development NGOs, fair trade associations, workers' unions, associations
for international solidarity, local administrations, universities
and social enterprises must all be the main participants in this
process in their own specific areas of activity. Even the system
of small firms, if properly guided and coordinated, can play
a role through training and the transfer of know-how, with the
aims of human development kept firmly in their central place
as the highest priority.
Italian NGOs believe that the decentralised cooperation approach
can activate mechanisms for popular participation in development
processes, influencing the spreading of real democracy. At the
same time, it can be an element in the process of building new
alliances and solidarity between citizens and organisations in
the South and the North of the world, so as to build - from the
bottom up - an alternative to the dominant development model.
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