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01/2006
  

[ Donors ]

The importance of Europe

The EU is world’s greatest donor. But spending money is not enough. Leadership is also about politics and vision. In the global arena, Europe needs to do much more on agriculture and trade.


[ By Hilary Benn ]

There is no doubt that development matters to EU citizens. Just look at the generous public response to the Asian tsunami a year ago. The hundreds of thousands who marched calling for poverty to be made history, and who attended Live 8 concerts – with Bono in London to Herbert Grönemeyer in Berlin – and the millions around the world who watched on TV.

Why this concern? Why this demand for action? Because on current trends we are unlikely to make poverty history quickly enough. Poverty will not be halved until 2150 – 135 years late. 30,000 children under five die every day – mostly from illnesses we can prevent. 100 million children of primary school age are not in a classroom with a teacher. And because poverty contributes to insecurity and migration, increasingly these challenges have a direct impact on our daily lives – as events in North Africa have shown.

We know what needs to be done, and we now have the opportunity to make a difference to the lives of people across the world who are living in extreme poverty. That is why development and Africa were among the UK’s priorities for its presidencies of the EU and G8 in 2005.

Developing countries have the prime responsibility for their own future. But developed countries have a responsibility too. The EU provides over half of the world’s aid. It is also the most important economic and trading partner for developing countries, offering specific benefits to developing countries, mainly to the Least Developed Countries. In short, the EU is the most influential and positive force for development in the world.

In 2005, the EU made huge progress in its efforts to help eradicate global poverty. In May, Europe made a historic commitment that should see aid double by 2010, to ¤66 billion. At least half of this aid will go to Africa. And the 15 oldest member states committed to all spend at least 0.7% of their national income on aid by 2015. German leadership and support was vital to achieving this commitment. These pledges helped secure increased aid from the non-European members of the G8 at the Gleneagles Summit in July. It was Germany’s leadership at the Köln G8 Summit in 1999 that helped deliver substantially more debt relief. At Gleneagles we built on this, and agreement was reached to cancel up to $55 billion of multilateral debt owed by 38 of the world’s poorest countries – money that can help countries get more children into school or vaccinated.

But these commitments may take many years to deliver, and we cannot wait that long. We must provide our aid more quickly, including using innovative financing mechanisms such as the International Finance Facility (IFF) and airline ticket levies. Recent agreement on the $4 billion IFF for Immunisation will help save 5 million children’s lives over the next ten years.


New Consensus

More aid is vital, but it must also be better aid. The agreement in November of the new ‘European Consensus on Development’ was a major step forward, because for the first time, all three major EU institutions involved in development –the Council, Commission and European Parliament – have an agreed set of shared objectives and principles for both member state and Community aid (see D+C/E+Z 12/2005, p.454, and p.41 in this issue). It followed almost a year of extensive consultation across Europe.

Poverty eradication, including meeting the Millennium Development Goals, is the primary and overarching objective of EU development cooperation. Least Developed and Low Income Countries will be given priority in terms of overall resource allocations.

The Consensus will strengthen our efforts to improve the effectiveness of European aid in line with the programme agreed at the OECD High Level Forum in Paris in March 2005. The 21-22nd November Council also adopted the Regulation to further untie EC aid – in other words to stop linking aid to purchase of donor country own goods or services – important because aid is up to 25% more efficient if untied. Our aid needs to be more predictable to allow governments to plan for the future. It also needs to be provided in a way which both ensures the money is used properly, but which imposes as few burdens as possible.

Africa is the continent furthest away from reaching the MDGs, but it is also the continent nearest to us. The 15-16th December European Council agreed an EU-Africa Strategy. This covers areas such as governance, human rights, infrastructure, HIV/AIDS, peace and security and migration. In 2006 and beyond, we will need to implement the different elements of the strategy. We also need to agree the best way to fund the EU’s Africa Peace Facility, which is helping African countries to stop and prevent conflict. Without peace and security, development and poverty eradication are not possible, and without development and poverty eradication there can be no sustainable peace.

25 million people live with HIV and AIDS in Africa and there are over 3 million new infections from HIV every year. That’s why the fight against killer diseases, and in particular HIV and AIDS, was a priority for the UK and preceding presidencies. The EU provided over 60% of the nearly ¤3.2 billion pledged at the September 2005 replenishment conference for the Global Fund to tackle AIDS, TB and malaria. On 1 December, to mark World AIDS Day, the EU issued a joint statement on prevention in order to promote the best approaches based on experience, and not ideology.

Aid is vital. But in the long term, fairer and freer trade is the best way to improve the lives of many poor people. Last week’s WTO Ministerial meeting in Hong Kong saw some progress on the current round of trade talks – the Doha Development Agenda – but not enough. It will require political leadership and hard work to complete a successful round, in particular for the poorest nations in the world, by the end of 2006.

While Europe is reducing its trade barriers, it can do more, including further reform to the Common Agricultural Policy. It can’t be right that 40% of Europe’s budget is spent on farming, which produces only two percent of Europe’s output – billions of Euros which mainly go to companies and landowners. And this waste is paid for – both directly and indirectly – by Europe’s public through higher priced food and taxes – costing the average household some ¤1,200 a year. We look forward to working with our European partners to address these reforms.

The poorest countries also need help to build their capacity to trade, and at Hong Kong we agreed to develop proposals on a mechanism for this by June 2006.

Thanks to the agreements reached in 2005, the EU now has a clear financial and political framework for development. In 2006 we must concentrate on implementing what we have agreed to ensure maximum impact. Among the challenges will be securing agreement on the external actions instruments of the Financial Perspectives – in particular the Development Cooperation Instrument.

We also need to learn more lessons from our response to the tsunami and the Pakistan earthquake. The EU has taken steps to strengthen its disaster response mechanisms this year – and Germany has taken a lead in Europe in its work on an early warning system for the Indian Ocean. But the international community, including the EU, can and must do better. The EU helped secure agreement in December to the new UN Emergency Response Fund, with a proposed size of $500 million. We must make this work, so that the UN can respond immediately to disasters.

Compared to the size of our economy, Europe is the most generous donor, and this is set to grow. But leadership is not just about providing the most money. It is also about politics and vision. Europe is a world leader when it comes to development, as e demonstrated at the World Summit in New York, and we need to do so on trade. It is our responsibility and in our interests to work ever harder to eradicate poverty across the world.

The agreement of the recently-formed coalition government in Germany echoes many of the same sentiments. So I look forward to continued close cooperation between the UK and Germany on these important issues in 2006 and during the German presidencies of the EU and G8 in 2007.



Hilary Benn
is a member of the UK cabinet as Secretary of State for International Development.
http://www.dfid.gov.uk