A future charter of interdependence?
Full text of an article from The Courier ACP-EU, No. 165, September-October 1997: pages 54-56
Since its signature in 1975, the Lomé Convention has been seen by many as a unique and successful model of cooperation between ACP states and the European Union. Since the end of 1996, three years before the fourth Lomé Convention expires on 29 February 2000, a wideranging debate has been taking place on what could be a future charter of interdependence between groups of partners who have not yet been clearly identified. Talk in the EU today about the ‘mixed results’ of Lomé cooperation stems from a number of factors. These include problems of applying the principle of equality between partners, the effects of trade globalisation under the World Trade Organisation (WTO) – posing a threat to differentiated non-reciprocal preference systems, the fact that European public aid must fulfil certain criteria and the tendency of the EU to assume, de facto, the role of the ACP partner in technical cooperation. In the absence of any alternative proposal as yet from the ACP countries, one must pay credit to the EU for being frank in its Green Paper – as an earnest pledge of future cooperation based on mutual trust. It is in this spirit, and against the background of economic globalisation, that questions need to be asked about the real substance of such fundamental concepts as good governance, human rights, mutual interest and the selectivity of aid. These concepts can be interpreted in a variety of ways, some of them even contradictory, and their implementation may need give and take between the parties. An attempt is made here to clarify some of the issues and, perhaps, contribute to reestablishing genuine mutual trust – a commodity that has been somewhat lacking in recent times.
The concept of good governance, which was introduced by the Bretton Woods institutions and can be interpreted at national level as meaning better administration of public affairs, draws on ideas such as individual and collective freedom, peace and security, but also on the need to have opposition parties contributing to a constructive debate within a country. In principle, the goal is to improve the well-being of the population. If the results of EU-ACP cooperation seem somewhat mixed today, it appears that the EU identifies the main cause of this as the absence of good governance, especially in Africa.
Rather than hunting for scapegoats, it may be preferable to place on record that those who have presided over the destinies of African states have not always been entirely representative of a civil society in search of the common good. But there can be no dynamic of sustainable development where there is no trust between the governors and the governed. This point is only rarely made in the debates on the possible reasons for the mixed results of the Lomé Convention. In addition, there are factors resulting from the process of globalisation, marginalisation and exclusion, that influence what is happening on the ground in most ACP states.
The refusal to allow civil society to be genuinely represented and legitimised has distorted most of the initiatives – often praiseworthy in themselves – designed to provide organisational and institutional support to the development process. This is even more apparent in the context of regional integration or of joint consultative structures between private sector and public sector partners. The wide-ranging debate on cooperation in the 21st century, which the EU desires, needs to avoid this pitfall.
Good governance must not be used as an alibi to justify the continuation or abandonment of cooperation between partners. It has an intrinsic logic which assumes genuine and effective participation by the players in the development process. The importance attached to civil society, NGOs and the private sector (both national and international) bears witness to the EU’s wish to promote a line of thought in which transparency and political realism are the dominant forces in an unstable and increasingly competitive environment. The introduction of respect for human rights as one of the criteria for granting aid can only help sustain the system. It is also necessary that the emphasis on human rights, especially in Africa, should not serve as a mask to conceal the absence of representative government.
Pressures from donor countries
With high unemployment and fears of mass immigration, Europe’s tax-paying electorate is exerting growing pressure for aid to be redirected towards tackling growing poverty in Europe. In principle, official development aid implies a lack of self-interest. But it still seems reasonable, given the EU’s current unemployment problems, to ask whether there is any real moral objection today to linking external aid to national ‘aid’ requirements. This could be done, for example, by supporting the private sector, enabling it to gain market share and thereby provide jobs in both the developing and the donor countries.
Using Overseas Development Assistance (ODA) funds as export subsidies for businesses in the industrialised countries, or to support the price of certain agricultural products, manufactured goods or services, is a controversial idea which provokes fierce debate in EU states. ‘Nationalist’ parties, which often attract the unemployed, find it an attractive proposition which apparently pleases their supporters. Backed up by a few well-chosen statistics showing how much the EU imports from ACPs and developing countries more generally, it can then be difficult to convince European taxpayers that the existing pattern of allocating funds for development aid should continue.
In reality, imports of manufactured goods from ACP states as a proportion of all imports to the EU – have fallen from 2.6% in 1976 to 1.1% in 1993. Meanwhile, imports from other developing countries have increased from 15.5% to 21.7%. The ACPs’ overall proportion (including primary products) has also fallen from 6.7% in 1976 to3.1% in 1993. (The drop, for developing countries as a whole, has been from 38.1 % to 27.5%). Europe has always been more interested in importing unprocessed raw materials and, in the meantime, the ACPs have lost market share in the manufacturing sectors. A more detailed analysis shows that the few manufactured items that ACPs do export to Europe are largely the product of very low value-added technologies. Furthermore, there are frequent problems associated with volumes available, quality, packaging and punctuality of delivery.
As a result of globalisation, and the increasing emphasis on the universal principle of competition, the moral obligation to provide aid is waning and self-interest is on the increase. Taxpayers in donor countries see development aid as a business whereby governments transfer large sums of money to national and international public agencies. These agencies are known, more than anything else for their ‘inability’ to produce regular, visible results and hence, their ‘failure’ to demonstrate that taxpayers’ contributions have been put to good use. If, on top of this, public figures in the ACP states have only a slender claim to legitimacy, it is easy to see why elected representatives within the EU should respond increasingly to pressures brought to bear by their voters. OECD statistics on aid to developing countries are beginning to reflect this situation, revealing a structural decline. On average, aid provided to developing countries by the 21 member states of the Development Assistance Committee (DAC) has fallen from 0.34% of GDP in 1984-5 to 0.27% in 1995.
All these factors strengthen the position of those on the EU side who would prefer to see aid to developing countries simply as one kind of investment policy among many others. The claim that Lomé has brought only a ‘modest return on investment’ tends to boost the argument in favour of a gradual transfer of public funds towards satisfying national needs, and especially for reducing unemployment in Europe. On the face of it, the political benefits at national level are more visible and closer to the hearts of the electorate. The question is whether the debate on the future, ‘post-Lomé’, will succeed in changing this trend.
Partnership principle in jeopardy
Article 2(1) of Lomé IV states that EU-ACP cooperation must take place on the basis of the fundamental principles of equality between the partners, respect for their sovereignty, mutual interest and interdependence. The future of cooperation between the EU and the ACP states if the Green Paper is any guide, appears biased towards the two latter principles. Now that good governance and democracy are being cited as conditions for providing aid, and given the significance attached to human rights issues, it seems that the EU has increased its room for manoeuvre and its ability to influence both its own taxpayers and the states that benefit from official aid.
For donors, the overall reduction in ODA allows them to reduce ACP dependence on public assistance and to achieve a transfer of resources to domestic programmes – including employment measures and the provision of indirect support for exports. With less aid on the table, a new redistribution between countries becomes appropriate. The focus is now on encouraging regional groupings and being more selective – an approach to partnership which is no longer politically neutral. The drive is to create homogeneous trading blocs, the effect of which is to encourage a situation where the manufacturing sector in the ACPs is primarily controlled by foreign investors. Their main objective is the restructuring of ACP markets.
Competition between regions and selectivity in the allocation of aid could provide new opportunities for those states and regions that have been preparing and opening up their economies over the last decade and a half. At the same time, it will lead to more marginalisation – even exclusion of other states and regions. There is a strong chance that ACP-EU cooperation in the 21st century will be more differentiated than in the past leading, in all likelihood to more ‘fracturing’ within ACP societies (especially those that are less advanced ) both in economic terms and at the social and cultural levels.
The dynamism of some of the emerging African countries, reminiscent of the Asian ‘dragons’, hints at a 21st century based on relationships of influence, including the penalty of temporary exclusion. In requiring that cooperation with countries where the rule of law is often weak be based on good governance, the result has been a strategic withdrawal of donors – who, as mentioned earlier, have turned instead to solving internal problems. In these circumstances, it is likely that cooperation in the next century will be multitrack and multi-faceted. With the private sector, NGOs the state and regional groupings fill adapting to new roles, the form of cooperation that emerges will have an impact on the individual, the family unit and the enterprise, as much as on the state, and regional and international structures.
Will this cooperation, regenerated and shaped by the globalisation of trade, production and capital and by new networks of influence, be able to sustain the development of ACP countries, and especially those of sub-Saharan Africa, in the long term? Will the ‘magic’ of the debate between the EU and the ACPs be strong enough to overcome the inherent contradictions contained in the concept of mutual interest, in a partnership game where the partners are clearly not equal in practice?
The concept of equality between partners may have become a ‘museum piece’, but even ‘mutual interest’ does not appear as a neutral concept. It favours those countries or regions which have the power to influence events. As for the idea of state sovereignty, how much credibility can that retain when the present indebtedness of most ACP states has led them to embark on draconian structural adjustment programmes?
Economic globalisation seems to boost trade at the expense of production. In this context, the creation of homogeneous trade blocs tends to favour the growth of regional markets. Globalisation could even place in doubt the present frontiers of the ACP countries. In sub-Saharan Africa, there is a danger that the change will come about whether the states wish it or not. Thus, the national trade frontier is in danger of becoming a regional or even global one. Several Far Eastern countries have opted for this strategy, backing it up by opening their economies to foreign investment. At the same time they have chosen the strategy of exporting products with a substantial value-added element. The result has been accelerated growth and improved: economic stability. The ACP states, especially in sub-Saharan Africa, are in danger, in the long term, of seeing their colonial borders called into question by the combined effects of the market dynamic and possible ethnic regroupings.
The general undermining of the partnership principle resulting from the actual experience of the Lomé Convention has driven the main beneficiaries of that principle – Mauritius, for example – to seek alternative solutions through the diversification of markets as well as products.
Those who initiated the debate which began with the publication of the Commissions Green Paper appear to be hoping that the scenario of ‘change in continuity’ will carry the day. The fundamental principles of the Lomé Convention – equality between the partners, respect of sovereignty, mutual interest and interdependence – are not essentially challenged in the Green Paper.
It should be pointed out that the global expansion of trade, production and capital movements is not always synonymous with development for the ACP states. The mixed results of the Lomé Convention seem to show that this form of cooperation has only partially achieved the development objectives which were apparently assigned to it. Good governance, sustained by the principle of Western-style democracy, is not sufficient to guarantee a genuinely representative civil society. It should be possible to overcome the absence of mutual trust, apparent throughout the course of relations between the EU and the ACP countries, if the protagonists in the debate display an unambiguous determination to start again on the basis of an honest dialogue.
The contradiction inherent in the basic principle of ‘mutual interest’ stems from the fact that in organising the cooperative relationship, each partner makes its relations with the others subject to the logic and needs of internal development. Paradoxically, in order for each participant to get something out of the system, concessions and compromises have to be accepted. The ability to thrash out acceptable compromises depends on the strength of the cards that each partner holds in his hand.
Also, compromises are only possible if everyone comes to the negotiating table with a blueprint of the society they are aiming to create. For Africa on the brink of the 21st century, this needs to be at least regional if not pan-African. From this standpoint, the reticence of the ACP states is a cause for concern. So far there is no collective ACP plan and genuine regional projects – going beyond the framework of the inherited colonial frontiers – are in short supply (with the notable exception of SADC in Southern Africa).
A vision based on homogeneous regional blocs, rather than simply on appearing with others on the list of least-developed countries, will perhaps see the dawn of a new collective awareness and responsibility – within the future broader regions extending beyond the frontiers of the ACP states. At the same time, we are likely to see more concentration on the ‘locomotive’ states within each of the future new regions while, within the EU, some countries might demonstrate a particular preference for cooperation based on historical ties and influences.
In fact, cooperation in the 21st century is likely to see the emergence of those regions that succeed in mastering the flows of funds, enabling them to obtain control, directly or indirectly, over raw materials, their processing including the maximum added value – and their marketing within the new regions demarcated by cooperation agreements. The strategy then, for the ACP states and developing countries in general, within a framework of organised networks, will be to ensure that their internal development needs are not left out in the process.
The possibilities arising from the new competitive environment mean that power relationships are likely to alter.The flexibility and thus, general uncertainty, underpinning cooperation arrangements between the various trade blocs are likely to lead to more instability, but also wider choices and an enhanced capacity to adapt quickly.
Finally, a new form of ACP-EU cooperation, if it is to be based on partnership,: with the parties fairly claiming to represent their people, would benefit if the principle of mutual interest were not seen as the only legitimate one. A collective desire to move towards a charter of interdependence could facilitate the re-emergence of mutual trust. There would be a guarantee of fruitful cooperation in which the economy would not necessarily be given primacy over cultural and social matters. This new form of cooperation, characterised by a generalised weakening of the partnership principle, should be capable of satisfying all those involved.
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