EU-ACP relations : Building for tomorrow

by Kenneth Karl

1989 saw the end of the Yalta inspired twin-superpower dominance. Nations had to examine their priorities in their desire for integration in an international environment in which geostrategic and economic realignment would be unavoidable. The philosophy which had served as a basis and reference point for North/South relations throughout the Cold War period is now being called into question and necessary adjustments in ideas have been triggered.

The Lomé Convention, which governs the development-cooperation relationship between the EU and the 70 ACP countries, is a unique North/South cooperation agreement on account of its contractual nature, its durability, the funds it allocates and the fact that it provides for a permanent dialogue. But it is also now at a decisive point in its history.

Those who regard the Convention as out-of-date and in need of renovation, and those more radical critics who believe that it no longer serves any useful purpose and must be phased out, both argue that a new direction is needed.

- Beyond all the criticism formulated against this system, the fundamental question remains as to whether the Lomé Convention will be able, given the necessary changes, to carry on after its fourth version expires.

The years between now and the end of the century will, naturally, see the application of the revised Lomé IV, including the substantial improvements made to it. However, this same period must also be used to prepare the ground for ACP/KU development cooperation in the future, whatever form it might take.

Shortly after his nomination as European Commissioner for relations with the ACP countries and South Africa, Professor Pinheiro commented, realistically, that the ACP countries are no longer 'in fashion'. The change of emphasis can be seen clearly if one looks at the EU's burgeoning relations with its eastern neighbours from the former Communist bloc (illustrated by the wide range of European programmes now benefiting these countries). One might also cite the strengthening of ties with countries in the Mediterranean basin. Economic and security concerns underpin this development, but it undoubtedly reduces the significance which was once accorded to the ACP states.

Moreover, the economic objectives of virtually all EU countries, as they seek to reduce budget deficits and deal with increasing internal social problems inevitably put pressure on the amount of development aid being granted to the Third World.

This situation is, of course, not restricted to the European Union - which in fact remains the world's main contributor of official development aid. At the instigation of a Republican dominated Congress, the United States is planning much more swingeing cuts in its contribution, both to certain international agencies and to certain regions (including Africa).

This undeniable cutback in public development aid has been offset in recent years by net increases in private capital flows, but the geographical distribution is highly skewed. Only a few of the poorest developing countries have benefited from the trend, the main 'winners' being the emerging states of Asia. These include countries such as China, India and Indonesia which, it is worth noting in passing, do not have particularly good human rights records, in the sense that the term is understood in Europe. Despite the fact that ACP countries have identified potential for attracting foreign investment, they have not actually benefited from this change in resource flows.

In this climate, with official development aid in inaeasingly short supply, innovative methods for making optimum use of the available resources must be devised within the context of the Lomé Convention.

On current indications, it is quite possible that in the year 2000, the Lomé Convention will be filed away in the archives. ACP/KU relations will certainly have to be more in step with recent developments on the international scene. The initial reasons for the establishment of a cooperative relationship between Europe and the ACPs, following the signature of the Rome Treaty, are now outmoded. As Paul Valery has commented: 'One of the worst mental aberrations is to think that things can survive when the reasons for their existence have gone'.

So, what type of development cooperation should the countries of the European Union and their ACP partners aim for in the future ?

Alternative trends

The EU has stated that it is in favour of a globalisation of aid within an innovative framework. One of the first questions to be asked is whether uniform cooperation with regions whose monolithic character is being increasingly called into question is still desirable.

Variable geometry in development cooperation relations is increasingly being seen as the trend to be followed.

If this option is chosen, there is a risk of the following scenario being created: The EU's relationship with the Caribbean could become diluted within its relationship with Latin-American countries and links with the Pacific countries could become confused with economic relations with Asia. What would then become of Africa, the continent needing most attention on account of the wide range of its difficulties and its increasing marginalisation ?

In 1990, the United Nations General Assembly, aware of the African question, adopted a new agenda on development in Africa, thus making that continent its number-one priority. Europe, on the other hand, must not simply focus on Africa but must invent new modes of action which are more concrete and more effective.

Secondly, recent trends imply greater conditionality. This has been taken on board not just by EU Member States. A number of multilateral aid agencies have also included it in their strategy. The OECD's Development Aid Committee believes that future relationships between North and South will be greatly influenced by conditionality and, indeed, the Organisation goes so far as to advocate this approach.

However, conditionality in terms of development is a strategic element which must be handled with extreme caution. If cooperation, whether today or in the future, is to be based on conditionality, then it can only be rendered effective if aid recipients (both governments and the governed) are genuinely committed to the idea. They must be convinced, in a climate of resource-scarcity, than the approach is motivated above all by a desire for greater success.

The European Union thus has a vital role to play, making full use of its advantages in terms of dialogue and consultation in order to prevent conditionality being perceived as a condescending mechanism. Thereby, it can help to prevent conditionality from generating the well-known perverse effects of 'tied' aid.

Of course, conditionality raises the thorny question of national sovereignty, but it is important to observe that modern international relations have moved on, both de jure and de facto, from a concept of absolute sovereignty to one of relative sovereignty. This is illustrated by the trend towards humanitarian intervention as a right, the requirements of the Bretton Woods institutions, supranationality in certain regional international organisations, and the very fact of world economic interdependence.

This does not mean that the developing states should sell off their sovereignty to the highest bidder but that conditionality should be the subject of negotiation. Donors must be more flexible in their demands and thereby give the country in question such room to manoeuvre as is necessary for programmes to succeed.

Thirdly, development of the private sector appears now to be approved by all parties. Since independence, the State has been omnipresent and omnipotent in most productive areas of ACP economies. Given the failures of the public sector, private enterprise is now being called in to help. Its development is one of the sector specific policies which will and must receive most support.

The development of the private sector must permit better distribution of the fruits of the growth that it generates and promote integration of the ACP countries into the market economy. There can be no question of pitting private enterprise against the public sector, because any Manichean approach in this sphere might prove to be risky. It is important also to stress that free market development cannot take place overnight and that it is subject to inescapable macro and microeconomic preconditions.

Indeed, the birth and expansion of a dynamic private sector depends on the politico-economic fabric. This includes reliable financial bodies, functioning financial intermediation, adequate infrastructures, technical qualifications and training, a suitable legal/ regulatory framework, institutions to support private businesses, the channelling of the informal sector and a public sector which is prepared to play fair, aware of its regulatory role. These, in short, are the necessary ingredients for the adjustment of the private sector to permit the development of a true enterprise culture.

The development of a harmonious private sector will make it possible more easily to achieve the transformation and export objectives required by international competitiveness. It should, therefore, help to counteract the erosion of commercial preferences generated by the Uruguay Round. The latter's time limits should, in any case, be extended, because it seems clear that the ACP countries will be unable to fulfil their obligations by the end of the moratorium obtained by the EU during the negotiations.

The notion of compensating for inequality that is found in international development law, implies the adoption of a normative system to counteract the weak trading position of developing countries vis-a-vis their competitors in the North. But in recent times, this idea has been losing ground and it is unlikely to cut much ice with the WTO authorities. Legal equality in a situation where there is structural inequality is not, in fact, equitable, and it is therefore necessary to find some other way of mitigating the adverse effects, looking at it in a global context.

Promotion of domestic and foreign investment should be better supported. People talk of the 'risk/ country' threshold that deters foreign investors. It may be that this can be measured objectively by looking at economic and other indicators, but even if this is not possible, it clearly exists as a psychological barrier. This is a problem for many ACP countries and it needs to be crossed, using measures which tackle the many obstacles to investment.

Changing the culture of development cooperation

Besides all the technical aspects, one could argue that the shortcomings of the Lomé Convention stem also from the perceptions of those involved in development cooperation. In short, it is the actual concept and culture of development aid which must be changed.

On the European side, the colonial legacy has conditioned attitudes, imprinting on them a dominant patemalism which is prejudicial to the aim of development. This European concept of cooperation must be overturned. Moreover, development cooperation must not be seen as the art of the possible but as the art of making possible what is strictly necessary, by virtue of genuine negotiation with the countries which have resolved to move forward.

Moreover, it is desirable to have a better developed policy of informing European public opinion about development cooperation. An effort is needed to counter false impressions, such as the one left by the French journalist who wrote: 'Official development aid is like taking money from the poor in rich countries to give it to the rich in poor countries'. Better information is needed to ensure that the public can decide such matters for itself.

Coordinating the Union's policies with those of the Member States now presents an enormous challenge. The political obstacles are huge and development cooperation may well suffer as a result of them if the objectives of coordination, coherence and complementarity contained in the Maastricht Treaty are not achieved.

As for the ACP countries, success in their economic development depends on many factors, cooperation being only one of them. Many political leaders in these nations have too often described cooperation with the North as the only way in which they can develop. In fact, this should be seen as nothing more than an additional factor - supporting the national effort and a genuine desire for development. It is pure fantasy to believe that development can be set in motion solely on the basis of an external impetus. To succeed, it must come from within a country. This is why future cooperation between the EU and the ACP countries must progress towards reinforcing the aptitude of the latter to devise, master and control their own development process.

In the future, the ACP countries must propose concrete and responsible solutions to their partners, doing so by means of the dialogue system. They must also promote development based on participation, particularly with the involvement of young people and women.

The fact that the ACPs can offer a credible prospectus for development must be acknowledged. It is undoubtedly a challenge, but it can successfully be overcome if a climate of stability, security and confidence is created, matched by an unambiguous political will.

In KU/ACP relations, programmes must include the long-term vision necessary for sustainable development. Too often in the past, the strategy has been aimed at an immediate and ostentatious result. Successful development in the future will depend crucially on a change in such attitudes.

K.K.

Let us know what you think

The debate about the future of cooperation between the European Union and the ACP states is now beginning to gash' pace. Last year, we established the 'Analysis' section in The Courier to report on this debate-and give readers an opportunity to express their own views on the subject.

The response so far has been encouraging, but it has come mainly from the European side. We are keen to receive contributions from ACP readers as well. If you have you own ideas or opinions about what should happen after Lomé IV expires, why not put them on paper and send them to us. Our address is on the inside front cover of the magazine.