C. Fight Against Poverty: The Basis of the EU Sustainable Development Strategy: Mr Jacobus Richelle, Director-General DG Development: Seminar on Globalisation, Sustainable Development and the EU's External Policies, organised by the Green Globe Task Force and the World Wide Fund for Nature, 22 October 2001.
Current events on the international scene demonstrate once again the big reality gap between external policy processes and the global developments. In spite of UN-summits, Göteborg conclusions, Cardiff processes and Johannesburg preparations, it turns out that the way we have organised our world and our societies is still not good enough to pass the sustainability test. Regardless of the numerous paper efforts to make the global development process more sustainable, it is painfully clear that some fundamental problems are yet to be addressed.
In my view - and this is the subject matter of my presentation - the concept of sustainable development should, on an operational level, be focused on the fight against poverty. We can easily talk another decade about the further conceptual fine-tuning of the three pillars of the definition of sustainable development, but it would be better to use our energy to take the bull by the horns and address the root cause of the unstable and unsustainable global development process. The development model championed by the rich world appears to be unsustainable on a global level and hence the functioning of it, and perhaps the model itself, has to be adapted. By integrating environmental considerations into the struggle against global poverty, the chances of achieving something meaningful will substantially increase.
Let me start with a few well-known figures. Globally, the extent of poverty remains massive, as half of the world's population live on less than €2 per day. Inequalities between and within countries are extremely high and in many cases rising. In 1960, the ratio between the incomes of the richest 20% of the world's population to the poorest 20% was 30 to 1. Today it is 90 to 1. The richest 20% of the world account for 86% of total private consumption expenditures. Today, consumption expenditure in an average African household is 20% less than it was 25 years ago. Average per capita household energy use in developed countries is ten times higher than in developing countries. In North America annual per capita gasoline consumption is more than 1600 litres. In Asia it is less than 50, in Africa the amount is still lower.
Poverty combined
with demographic growth, lack of access to resources in some areas, excessive
consumption and production patterns in others: these are the elements
that define the gravity of the challenge. It is not absolute scarcity
of resources, which is the key problem of poverty in the world, but the
issue of distribution of resources and the opportunities to take advantage
of them.
We have to note that a radical and immediate redistribution of global
resources was and is not on the official political agenda of the developed
countries, either before or after 11th September 2001. But it is my impression
that there is definitely more genuine interest from the press, civil society
and politicians in discussing questions of global equity and lack of developmental
equilibrium. In spite of all incidents around the anti-globalisation movement
we have to promote and intensify a constructive and structured dialogue
on globalisation. Many groups working under the flag of anti-globalisation,
and notably those who focus on the problem of exclusion, are important
partners in our debate. This debate must continue. There is a window of
opportunity. And action should follow.
The Commission will play an active and positive role in these discussions. As a matter of fact we are currently preparing a communication, i.e. a policy paper, to Council and European Parliament on the external dimension of the EU sustainable development strategy. Although the work is still ongoing and no final decisions have been taken, and it is too early to report on its content, I can already clearly state that the Commission proposals will be ambitious and action oriented, based on a strong determination to break away from unsustainable practices and to enforce truly new innovative policies.
I will give a few examples of the issues under discussion. They are not new, but recent deliberations in various councils have shown a new interest and determination to move towards real action.
An important issue to be addressed is the fact that for decades it has been popular within the international community to set targets and declare financial intentions. But look at the facts.
Only 5 OECD-members have reached the promised level of 0,7% GDP to be spent on Official Development Assistance (4 out of those 5 are EU-member states; another member state has politically committed itself to reach that target within a few years). The overall OECD average is now 0,24%, instead of 0,7. It goes without saying that this gap between policy and practice is unsustainable. Is it not time to put the money where the mouth is?
At the European Council in Göteborg in June 2001 the EU committed itself to reach the UN target as soon as possible, and to achieve concrete progress towards this before the World Summit on Sustainable Development in Johannesburg in 2002. Of course, for this to produce results in reduced poverty and sustainable development, additional quantity needs to be matched by continued improvements in effectiveness.
The staff of World Bank and IMF calculates that the realisation of the development targets from the Millennium-summit (i.a. halving world poverty by 2015) will require a doubling of aid. This would still only bring the total to 0.48% of OECD GDP: truly to eradicate poverty will demand a much more ambitious effort.
Of course, one could argue that aid is not (or even should not be) the
solution for the financial problem. Trade and economic growth in developing
countries are also relevant and from a point of view of sustainability
most likely preferable. Just a few figures in this respect: I have seen
calculations, indicating that (without extra aid) economies in developing
countries have to grow by 7% per year from now till 2015 and beyond to
finance the already mentioned Millennium goals. The present forecasts
show nothing of that kind. Another figure: If we would decrease the world-wide
agricultural subsidies with about 15%, it would be possible to more than
double the present total amount of ODA.
The 2002 International Conference on Financing for Development in Monterrey provides a milestone on the path towards the UN 0.7% target. Following its renewed commitment to this target in Göteborg, the EU now needs to draw a clear road map setting out how it intends to reach this financing goal.
Secondly and equally important, we should improve the coherence of our policies. Still too often domestic EU policies have 'spill-over' effects that hinder the fight against poverty in developing countries. We should therefore effectively ensure that EU policies on trade, agriculture, fisheries, environment, public health, consumer protection, higher education, immigration etc. are not in conflict with the interest of developing countries, and are actually as far as possible conducive to their development. We must carefully look into the external effects of tariff peaks, tariff escalation, rules of origin, anti-dumping policy, arms export regulations, export refunds, sanitary and phyto-sanitary measures, bio-technical inventions, etc.
This is a tall order, and involves a lot of controversial policy areas. But we must get our priorities right. We know that African farmers are still pushed out of their own local market because of the unfair competition with subsidised foodstuffs from the north. We have to make sure that African fishermen and women do not pay the price for the over-capacity of the fishing fleet of developed countries. We must get our house in order, within the Commission and in the Council. It is necessary to renew and sharpen the debate on the interpretation and application of the notion of policy-coherence that is central in the EU-Treaties.
If you talk
coherence, you should also address the classic problem of market access.
Our developing partners complain that traditionally, under the Common
Commercial Policy, tariffs tend to be highest for products in which developing
countries have a comparative advantage. Essentially, this means labour-intensive
manufactures (e.g. textiles, clothing, footwear, etc.) and many agricultural
products. This is seen as an unsustainable protectionist bias, even though
some of its negative effects are in practice mitigated by mechanisms such
as the Generalised System of Preferences (GSP), including the recent Everything
But Arms (EBA) initiative, and other preferential trade arrangements.
Although real progress is made with the EBA initiative, it also provokes
criticism. I have heard the qualification "everything but farms",
because of the long transition time for some important agricultural products.
Some non-LDC developing countries feel that they are punished by the limitation
of the scope to LDCs. One could argue that it would be in line with the
Göteborg-aspirations to broaden the scope of the EBA initiative and
to gradual eliminate all tariffs and customs measures having equivalent
effect for all developing countries within a fixed period of time. Clearly,
such a process should be framed within the WTO process and should be compatible
with our existing commitments in the context of bilateral trade agreements.
We should also carefully look at the preferential margins currently enjoyed
by some of the most fragile and poorest developing countries. Hence such
a full elimination of all tariffs is not for tomorrow. But the political
message ought to be clear and simple: the Community does not want to pose
any tariff barrier for any product coming from developing countries.
Tariffs are not the only, and not even the most important, obstacles to trade. The EU is also committed to ensure that developing countries' other trade related concerns are seriously addressed in the WTO, both in specific provisions and in rule-making processes. International trade can make a decisive contribution to sustainable development by promoting the equitable integration of developing countries into the global economy.
For this to happen, developing countries need to be able to benefit fully from liberalisation. The Community has consistently expressed the view that a new round of trade negotiations should make development issues a priority. Now it is time to deliver on this commitment. In this context the WTO-related concerns of developing countries in such areas as Intellectual Property Rights (TRIPs), Technical Barriers to Trade (TBT), Sanitary and Phyto-sanitary measures (SPS) and Special and Differential Treatment (SDT) need very careful consideration.
Furthermore, the EU is committed to press forward the process of debt relief launched under the Highly Indebted Poor Countries (HIPC) Initiative. Unsustainable debt has crippled economic growth and undermined the ability of some developing countries to provide basic services for their populations. The HIPC Initiative was devised to tackle this problem, while providing reassurance that the benefits from debt relief would indeed be used to reduce poverty and not to enter into a renewed spiral of indebtedness. We will work together with the World Bank and others to consider both whether the Initiative has been sufficiently radical to launch participating countries on a path of sustainable growth and development, and whether its scope may be extended to address the problems of less poor but similarly heavily indebted countries.
My final example relates to global governance, or rather the lack of it. The "globalised world" suffers a major deficit of governance. Addressing these structural deficiencies would greatly help improve the impact of national and international policies to achieve sustainable development objectives. Climate change, poverty, disease or terrorism affect the interests of the global community at large.
No country - not even the largest - is invulnerable to shocks engendered elsewhere. In the face of these challenges, the creation of a transnational 'communities of interest' should now be easier to construe than in the past.
It should however be underlined that both the legitimacy and the effectiveness of the global governance system depend on the capacity for all nations to participate. Only more inclusive and transparent decision making processes can help promote common universal values and ensure a consistent implementation of agreed strategies. Besides formal institutions, informal fora such as the G7/8 have demonstrated their value added by giving political impulses to ongoing or emerging measures and policies. However these processes marginalise a great part of the world population which does not participate in the definition of the international public rule. There is a good case for creating more representative fora, where also the big players from the South would be represented. Perhaps we should re-examine ideas that have been circulating for decades like the Human Security Council or the Economic and Social Security Council.
To conclude, recent political developments have shown us that there is both a need and an opportunity to make a quality leap towards a coherent external policy conducive to long term sustainable development. The work does not start in September 2002, nor is it limited to the World Summit on Sustainable Development. We should actively and consistently work from here through Doha and Monterrey (Financing for Development) and beyond. I thank the organisers of this seminar for their timely and useful initiative. The Commission will take good note of today's and tomorrow's discussions, which - I expect - will give us fresh energy and inspiration for the necessary work ahead.