E. The Environment and Poverty: Legal Dimensions and Moral Responsibility: Athanassios Theodorakis, Deputy Director-General DG Development, Summer Seminar on Halki 98: Halki, June 14-20, 1998
It is a great pleasure to be invited to address this distinguished gathering on the subject of poverty reduction. This is a central plank of the European Union's development policy, and has been subject to much discussion recently within the institutions of the Union. So it is timely to be able to share with you our recent thinking on this subject.
The topic of the seminar is one of the most important issues in the world today - the need to arrest the increase in poverty, and indeed to engage in a process of eradicating the most extreme forms.
The European Union formally articulated a policy to combat poverty in December 1993. This recognised that poverty is a multifaceted concept. Of course, the lack of sufficient income to meet basic needs is the core of the economic idea of poverty, but it is so much more than that. We recognised that the poor often lack access to employment opportunities generated by the growth process, and social services may be far away and unaffordable. We also recognised that poverty is associated with an unequal distribution of society's assets and resources. It is therefore not surprising to find that the very poorest are frequently women, who face all kinds of gender biases in the way resources are distributed. In brief, we recognised that this lack of access to opportunities and services is not merely a misfortune, but could be the result of political processes that exclude the poor. Poverty is not just an economic concept but a social and political process.
If we recognised the complexity of the issue in 1993, we have to concede that it seems even more complex today. In the invitation to this seminar, Bishop Emmanuel highlighted the contradictions between globalisation of the economy on the one hand, and increasing poverty on the other. Another issue I would like to mention is the increasing recognition that uncontrolled exploitation of the earth's environmental resources is another threat to achieving sustainable economic growth and poverty reduction. A third point that has focused the world's attention is the increase in conflicts, veritable political disasters often articulated along ethnic divisions. Such issues have made the fight against poverty an even greater challenge than they appeared in 1993.
Clearly we have a major challenge to combat poverty. So how have we done so far? I regret to report that the results of the struggle against poverty have been patchy. Yes, there has been economic growth in some parts of the world, and, yes, some of this has been translated into a reduction of poverty. But there remain many areas of the world, notably sub-Saharan Africa, where growth has been slow or non-existent, and, where it has occurred, the extent of poverty has been little touched.
In recognition of the problems, in Copenhagen, at the Social Summit, the commitment was made by the international donor community to meet this challenge. More recently, there have been ongoing discussions in the DAC about setting monitorable targets. The one that concerns us here is the idea to reduce extreme poverty by half by 2015.
These targets are still not agreed, and indeed some would argue that they are unattainable. The World Bank has done some work on this. The picture presented by the Bank has both light and shade. While it is unlikely that the target will be reached on present policies, it might be reached with better policies. However, there are some hard cases - notably those countries in sub-Saharan Africa plagued with bitter inter-ethnic conflicts, some ongoing. These countries will not even be able to tackle the issue of poverty, let alone reduce it by half, until they can resolve their political problems.
How are we going to contribute to the challenge? In retrospect, I feel we have to be honest in concluding that the instruments the donor community used to combat poverty have been insufficient for the task. While our concept of poverty was broad, our instruments were generally limited to the promotion of economic growth and support to social services. We need to develop a wider range of approaches if we are to deal effectively with the issues of inequality, globalisation, environmental aspects, and ethnic conflict that contribute to the increasing poverty in the world.
Partnerships
The first of these approaches is the promotion of partnerships. This idea
figures largely in the negotiating mandate for the new EU-ACP arrangements
that have recently been discussed in the EU Council of Development Ministers.
We recognise that combating poverty effectively is beyond the capacity
of any one organisation. There needs to be concerted action by several
of the stakeholders. Government must of course play its role, but there
is scope for partnerships with the private sector and community based
organisations within the country concerned. If these local stakeholders
are committed to the fight against poverty then it makes sense for the
international community of donor agencies and NGOs to form partnerships
with them.
Underlying this concept of partnership are several other ideas that are current in the development discourse. There is a recognition that there are roles for both government and the private and voluntary sectors, and that the role of government is to facilitate and regulate these other sectors. There is a presumption therefore that we are concerned with good governance. This has several dimensions; the government must be legitimate and democratic, and must exercise its power in an uncorrupt fashion. Of course, many governments lack institutional capacity to undertake the roles required, but this is an area where donor agencies can help to develop capacity. This might also mean helping to develop the capacity of local civil society institutions.
These approaches to institutional capacity development to strengthen the effectiveness of partnerships also imply another aspect of emerging development policy. Increasingly, we are moving away from the conventional development project to sector wide approaches. If we are to focus on institutional capacity development in this way, this implies a much longer time horizon (probably 7 to 12 years) than the conventional project (3-4 years). Is this unrealistic? Well, we are already seeing this kind of support to sustainable microfinance institutions.
Trade
I would now like to turn to trade. I noted above the importance of globalisation,
especially of the international trade environment. Our assumption is that
this is generally positive for poverty reduction by promoting economic
growth.
Trade liberalisation contributes to the strongest economic growth. Recent economic development proves that developing countries which have adopted outward-oriented trade policies have experienced the highest rates of growth. World GDP and trade grew at impressive rates in 1997, merchandise exports grew at 9.5 %, the second highest rate of trade growth recorded in the last two decades, and out-paced again world output growth by almost three times. This undoubtedly proves that trade is the best engine for sustained growth. And we know that these results cannot be achieved in a protected economy. Trade expansion necessitates an open and transparent economy, attractive and stable markets for the investors in order to improve supply-side conditions.
However, when we raise the question of liberalisation, we have to ask what kind of liberalisation; to what extent and at what speed, because reality shows that trade liberalisation reforms incur adjustment costs before trade benefits and the dynamics of openness can raise the living standards of all the people and ultimately reach the poor. Indeed, trade liberalisation is not just about trade and economics; it is also about stability, sustainable development and poverty eradication. It is a way to achieve security and peace, as European construction has shown us.
Over the years we have learned that we will need specific measures to integrate the poor more effectively into national economies if they are to benefit from international trade.
In addition, I must be aware that there are negative aspects to globalisation of trade which need to be minimised, otherwise the most vulnerable groups would suffer. For instance the negative implications for child labour and indigenous peoples create concern in the western media. Therefore we need to assess the impact of trade liberalisation and international negotiations on the most vulnerable groups, and consider the appropriate measures. But there are problems with governments, or even international organisations, trying to impose conditionalities on the international trading system, although these will still be discussed.
An interesting alternative to government imposed conditionality is the way consumer movements try to have influence on the market. Certain experiments in ethical trade are now well established, especially with regard to certain commodities like coffee. However there is much more to do - for instance with certification - before the consumer can feel confident that their social and ethical standards are being upheld by the market.
Environment
Through its experience in practical development co-operation work in areas
affected by poverty around the world the European Commission acknowledges
that there is a strong link between poverty and the environment.
High incidence of poverty is found in particular in areas where environment damage is highest, whether it be in rural areas on the fringes of the Sahara or in the so called 'favelas', 'cross roads', 'high-density areas' of the big cities on earth. Many analysts, therefore, conclude that there exists a cause-effect relationship between the two. According to them, poverty makes the poor not to care about their environment and their natural resources which, therefore, degrade rapidly. As poor people's livelihoods depend to a large degree on the utilisation of natural resources a degrading resource base will result in ever diminishing incomes. This eventually becomes a vicious circle accelerated by high population growth.
Despite this often-cited overly pessimistic almost Malthusian scenario, however, there is scope for hope. The European Commission's experience in many instances shows that the widely perceived simplistic nexus between poverty and the environment does not always hold in practice. Instead of this, the relationship is much more complex. There are, for instance, numerous 'win-win' situations, where development co-operation activities assist poor people to take better care of their environment while at the same time they provide opportunities for a better livelihood for their families. Community-based eco-tourism in marginal wildlife-rich areas in southern Africa and along the beautiful coastal areas in the Caribbean provide proofs thereof. Waste collection and re-cycling in big cities are a source of income for many poor people and can still be improved. Relatively simple, labour intensive water-harvesting techniques in dry areas provide good examples for the improvement and reduced variability of agricultural harvests.
Of course, such solutions are not blueprints but location-specific and have to be developed together with the poor.
However, such technology-driven solutions do not take away the responsibility of societies in the developing countries to improve the access of poor people to resources and to share more equally the use of limited natural resources. Governments in the developing nations have to play an important role. The rational utilisation of the environment is determined to a large extent by a sound institutional and policy framework. Such a framework needs to provide the right incentives for the poor to utilise resources in an environmentally sound way. This comprises legislation which defines clearly the access to resources, the distribution of responsibilities within the society, the environmental impact assessment requirements for private and public investments. Furthermore, decision making processes need to be structured in a balanced way to take account of the interests of the poorer segments of society and of the future generations.
One important lesson from our development co-operation is that decentralisation of decision making together with capacity building can facilitate that the poor assume their responsibilities vis-à-vis the environment and play an active role in improving the environment.
Through an enhanced and well-coordinated policy dialogue with developing countries donors can assist their partners in necessary reform processes which have become a crucial response to rapidly changing conditions in developing countries.
Of course, I also need to mention that there is yet another important dimension of environmental problem solving which goes beyond individual developing countries. The risks of global climate change demonstrate very clearly how closely different parts of the world are interconnected and that many global environmental problems have a direct bearing on the poor. Therefore, a true solution to environmental problems of this global nature can only be found when production and consumption patterns around the world change significantly. Sustainable development which strives at an intelligent balance between economic, environmental and social objectives, nowadays, is no longer a process which exclusively concerns developing countries and the poor but also the so-called developed societies. In this respect, it must be very disappointing for the poor to see at which slow pace international negotiations related to global environmental issues proceed and that these fora are often used to pursue completely different political agendas.
Conflict
Prevention and Resolution
Many of the present world's disasters are complex political emergencies
compounded with natural calamities. For instance, in the Sudan now the
long term food security of the people might find its immediate cause in
the drought, but the underlying cause is the political conflict. The solution
to the problem depends on a permanent ceasefire and successful peace negotiations.
The situation in the Sudan is just the latest of these kinds of human tragedies and donor agencies are increasingly looking for ways to assess the risk of this kind of political emergency, and to avert it, or at least to obviate the worst consequences. However, our understanding of effective measures of conflict prevention and conflict resolution is still in its infancy. Hopeful signs of peace-building are too frequently dashed by the intransigence of the rival parties.
This intransigence also undermines our own efforts of emergency relief. Recently the European Council of Ministers has asked the Commission to consider how we can protect our relief workers and secure the "humanitarian space."
Conclusion
In conclusion, the EU 1993 Council Resolution on the fight against poverty
recognised that, although progress has been made in the fight against
poverty, there are new uncertainties caused by globalisation of the world
economy and increasing incidence of complex political emergencies. We
will have to intensify our efforts to implement a comprehensive approach
to poverty reduction, one that recognises the importance of inequality
and that economic growth should be equitable and sustainable. These efforts
will have to build on stronger ownership of policy initiatives to reduce
poverty by our partner countries in Asia, Latin America, and Africa. These
ideas are currently being discussed in the negotiations for the new EU-ACP
arrangements. The efforts will also rely on partnerships between different
actors in the development process, and complementarity of actions between
the Community, Member States, and other like-minded international donors,
including NGOs such as "Orthodoxy and Development."