Friday, 12 November 2010

Aid is not charity, should “benefit the giver”, Piebalgs- EU Commissioner for Development

Updated 12 November 2010
11 Nov 2010, Tallinn (Riaz K. Tayob & Aleksandrs Cepilovs*) - EU Development Commissioner Andris Piebalgs said that EU aid was regulated by the Lisbon Treaty, and that it was not charity. Later he also explained what was meant by reports that EU development aid “should benefit the giver” and also provided an example of what he meant by “value for money”.
Piebalgs was the main speaker on a panel at Tallinn University (Estonia) with discussants Marina Kaljurand (Estonian Ministry of Foreign Affairs), Indrek Tarand (Member of the European Parliament), Evelin Andrespok (Estonian Roundtable for Development Cooperation), Dr. Leif Kalev (Tallinn University) and Prof. Rainer Kattel (Tallinn University of Technology).

During question time, Piebalgs was asked to explain what he meant by the statement that “the giver must benefit” when it comes to aid given by the EU. He was also asked whether this implied a seismic shift in EU aid policy. He replied that he had the legal obligation to eradicate poverty under the Lisbon Treaty. “So whatever I should do is not charity”,  it is for a purpose, to achieve the treaty obligations. He could not just give money because it was nice to give. There was a need to answer to the citizens of the European Union on achievements with the money, and this is what is meant by  benefits. He did not think it was a shift, but said it was now spelt out much more clearly.

The panel discussion also addressed issues related to China's role on aid, the relationship of the Development Commissioner and other entities, the lack of a focus on industrial policy in EU aid and the problem of fragmentation of European aid.

Europe should focus where we have particular expertise, like energy. This is what he meant by value for money, it was not some clever measurement, Piebalgs said.

Piebalgs complained that the voice of the EU was not being heard, and referred to the fragmentation in EU aid delivery. He asked whether had a role to play? Europe gave 60 per cent of the development aid and its voice should be heard more strongly, he said. He also urged member states to honour their pledges on aid. The problems faced in the poorer nations are worse than at home.

Piebalgs added that development aid cannot be forever, there will have to be finality in aid. By achieving results, countries should then not receive aid because their level of development would allow them to deal with their own problems. Alluding to the Millennium Development Goals (MDGs), he said, it is a daunting task even though progress has been made.  EU members like Estonia could shape the position on aid, and would get a hearing.

Aid must bring real value for money and make a value added contribution, he said.

Piebalgs recommended that countries engage with the recently released Green Paper on Budget Support which requires tough decisions because priorities need to be found.

During the panel discussion, Prof Kattel of Tallinn University of Technology said that the problem with the MDGs was that they address the symptoms of poverty and not the causes. He explained that a search for the terms 'industrial policy' and 'productive capacity' on the EU Aid website reveals no results. This indicates that the EU is behind the curve even compared to the World Bank which is trying to find how to develop industrial capacity in developing countries. He suggested that the EUs Green Paper on Development, referred to by the Commissioner, be looked at from this angle.

Kattel added that the EU should reconsider its Free Trade Agreements (FTAs) with poor countries. This is not only important for agriculture but also important for building capacity of the least developed countries (LDCs). Under global rules, LDCs can apply for infant industry protection and the EU can help with finding out what areas they can specialise into.

Kattel reacted to EU proposals for investments into the private sector, entrepreneurship and public-private partnerships and said that these arrangements lend themselves to corruption. What is lacking in many developing countries is basic governmental capacity. Instead of pushing for partnerships with industry, which many countries cannot handle adequately, the EU should support this basic capacity, Kattel said.

Kattel applauded the EU for its structural funding to members within the EU. Although these had been criticised for being cumbersome, he said that this was needed funding.

During the question and answer session, Piebalgs was asked about his relationships with other entities.

First internally with Baroness Ashton (High Representative for Foreign Affairs and Security Policy), second with the EU Parliament, and, third civil society from Africa, Caribbean and Pacific countries engaged in free trade area negotiations (Economic Partnership Agreements).

[Recently the DG EuropeAid (AIDCO) and DG Development (DEV) were merged to form a new Directorate-General which is known as DG DEVCO: EuropeAid Development and Co-operation Directorate-General. Where responsibility lay for final decisions was somewhat unclear according to some reports.]

Responding to the “who is the boss?”, Piebalgs said that the bosses are Indrek (the European Parliament) and Marina (member states). Neither he nor Baroness Ashton could do anything if they did not agree. He said he was responsible for development policy formulation, programme action inside External Action Service and implementation. But when proposals were made about programmes, like country strategy papers, he needed full endorsement by Ashton as the super-boss of external relations. Ashton was the one able to say, 'you can deal with this country but not with that country because of the human rights record.' This was a simplification (of the process) he explained. Ministers of foreign affairs should also endorse (the proposals). But for development objectives, implementation was fully his responsibility. Whenever there was a proposal, agreement was needed with Baroness Ashton, but then both needed agreement from parliament member states. He said he was trying to make “a more determined system”.

On relations with civil society, Piebalgs was asked whether the EU was committed to its obligations in the Cotonou Agreement as Kenyan and recently (in June) East African groups had criticised the  EU for failing to meet these consultation obligations.

He did not share the accusation that there was no consultation. Piebalgs said that the Cotonou Agreement was rather complex, and the EU had been “in full complementarity” with the agreement. “If we would have broken (the) agreement we should be called to justice. This accusation has no grounds.” To give one example, mentioning the  Green Paper, has said he had been meeting with the ACP ministers to have consultations.

A question was asked regarding the relationship between the Commission and the EU Parliament, as Parliament had passed a resolution that states the Free Trade Agreements (FTAs) with poor countries should not hamper access to medicines. The Commission, however, continued to make demands in FTA negotiations that hamper access to medicines. What was the relationship with the Commission to the Parliament as “the voice of the people”? This issue was not addressed.

And the role of China was raised twice.

First, the representative of Germany said that Africa would be the centre for aid for the considerable future. He thought Africans were grateful for European Aid, because what would they do without the help of the Europeans? But there was another player on the continent, China, who had quite a different approach. Sometimes their role could be looked at in a critical way, he said. He asked what Piebalgs thought about their role and whether he would be open to dialogue with the Chinese.

Second, Piebalgs was posed with the issue of EU cooperation or conflict with China in Africa. When two elephants fight, like China and EU, the Africans say that the grass suffers. But when elephants make love the grass also suffers.

He said this comparison was wrong. Europe was not an elephant and expressed that he would like to see the grass benefit. He could not say what Chinese development objectives were or how they formulated them.  On the formulation of development policy, for the US it was national security. For Europe it was not. It was poverty alleviation and eradication.

He said Europe does deal with China. In the G20 process there is a development arm, which is the “right process”. The involvement of China is more on a multilateral basis. With the US Europe has developed much more closer ties, there are road maps on food security, climate change, MDGs. He explained that with China there is not a budgetary strategy. But this could come if the G20 process brings us closer. “I believe the Chinese are not engaged in the debate for a very simple reason because they don't feel we are relevant, if they feel we are relevant. Because we are dispersed. We are everywhere. And we are not the same type, the same magnitude,” Piebalgs said. “So they don't feel us.”  He added that they are where the resources and transport infrastructure are. Their aid visible was made visible. Speculating he asked, 'but what is the longer term?', this was not the point (for them). He said that they did not think the (recipient) country was at fault. The philosophy is different. The Chinese provide very clear developments which he would call investments, as it is not development aid. Development aid would be different, he opined.

He did state that Europe should learn two things from the Chinese, size and focus. Piebalgs said that the size of the budget that is under his control was small relative to that of China.  And the EU has established an investment facility blending loans with grants, which was much bigger. And because of  the size, focus was needed. He recommended that the focus be where Europe has particular expertise, and that is energy. That is what he meant by value for money. It is not some clever measurement. “I believe that this is the right thing to do,” he said.

Indrek Tarand (MEP) said 84% of Estonians supported humanitarian aid. He said that some research indicated that 55% of EU development aid was spent on administration and control, and that this needed to be checked. He added that there is a dilemma on whether to assist countries where there are human rights concerns. Other countries like China have no problem with human rights and because of this Europe looses competitiveness (in these countries). He said on agriculture that modern agricultural techniques are introduced in countries but Europe refuses to open its markets to other countries. He also emphasised the opportunity of a role for Estonia in the new state that is to be created in Southern Sudan.

Kaljurand from the Estonian Ministry of Foreign Affairs said that their development aid would prioritise countries in the east of Europe because this is what their partners expect of them.

It was also emphasized by Peibalgs that the new members of the EU, like Estonia or his home  Latvia, could share their experience of remarkable success as transition economies. He also mentioned that Estonia has already used it’s expertise in reforms and practical knowledge in remarkable way to help such countries as Ukraine and Armenia and he encouraged and supported this fully.

Andrespok, for the Estonia Round-table of NGOs, said that while it is said that development aid was a selfish enterprise, we all benefited from better development in other parts of the world, poverty reduction should be kept as the main objective. Gender also needed to be prioritised. Anderspok also said that many countries have not kept their promises on development aid and  needed reminding. Coherence was also needed on development and trade policy.

Dr Leif Kalev of Tallinn University said that Europe should not be hesitant because of colonialism when it focuses on effective aid or cooperation. Europe should not be ashamed of promoting democracy.

Students of Technology Governance at the Tallinn University of Technology. This article is published under the Creative Commons conditions 1) Attribution — You must attribute the work in the manner specified by the author or licensor (but not in any way that suggests that they endorse you or your use of the work),  and 2)Noncommercial — You may not use this work for commercial purposes.

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