Europe

The Lomé Convention in focus

Poll results and new brochure launched in Brussels

A new poll of Europeans high lights a deficit of information about the European Community's development policies. A brochure just published on the Lomé Convention, available in all EU languages, seeks to fill some of the gaps.

At a press conference on May 21, Development Commissioner, Joso de Deus Pinheiro, unveiled the findings of a survey commissioned from the Brussels consultancy, International Research Associates (INRA). The aim of the exercise was to sound out how Europeans perceive developing countries. The sample was 16 346 people, of 15 years and upwards, who were polled in the 15 Member States during December 1995.

The survey shows that since 1991, helping the poor in the developing countries has slipped in the 'league' of issues of most concern to Europeans. The subject now ranks eighth in a table topped by the fight against unemployment. But the better news is that Europeans believe development of these regions should be the fourth most important priority for joint actions between Member States. This comes just below combating terrorism, environmental questions and defending Europe's economic interests.

While 82% of Europeans are favourable to development cooperation, 12% are against. The degree of support varies, as one would expect, from one EU country to another. Interestingly, the survey shows that Member States facing an economic squeeze are the most reticent, irrespective of their past track record in development aid. In Belgium, only 65% are in favour while in

Austria and France, the figures are 69% and 72% respectively. At the other end of the scale, Greece comes out top with 97% just ahead of Spain on 96% and Ireland on 91%. INRA's explanation for this variation is that it reflects the economic problems which are increasingly being felt in northern states of the Community. It is also worth pointing out that nations on EU's southern flank may be more convinced of the effectiveness of aid since they themselves are recipients of EC structural funds allocated to modernise the Union's disadvantaged regions.

But INRA's report also reveals some misconceptions about European development aid. These, says Commissioner Pinheiro, may be attributed to the lack of visibility of the relevant development policies.

57% of those questioned believe that the bulk of the Community's assistance consists of emergency aid, rather than longer-term project support. The reverse is actually true. More people answer 'no' then 'yes' to the question: 'Does aid contribute to reducing poverty in developing countries'? And most consider that United Nations agencies (UNICEF, UNESCO etc.) do more in the field of helping developing countries than the EC. Non-governmental organisations also have a high profile, with the EU Member States and Bretton Woods institutions (IMF and World Bank) trailing behind.

Other key findings from the poll - which Professor Pinheiro says will provide much food for thought in the coming months as thoughts turn to cooperation after Lomé IV - are highlighted in the box.

Mid-term review and beyond

Professor Pinheiro feels that some of results, which signal the need to tighten up on the management of development aid, have already been addressed in the mid-term review of the Lomé Convention which will come on stream from the beginning of 1997. The programming of the eighth European Development Fund (EDF) is already well under way and, with a view to increasing the effectiveness of aid, just 70% of resources earmarked for each ACP state will be allocated at the outset (for a three year period). An analysis of how the remainder should be spent will take place at the end of the three years. In addition, Professor Pinheiro indicated that a 'strategic' document was being drawn up on each of the 70 ACP states prior to allocation of funds. This was being done in 'permanent consultation with Member States and Commission delegations, in the interests of achieving a real synergy between the two.'

More sweeping changes to the relationship are likely after the current

Some key findings from the INRA report

- Aid must reach its intended destination and arrive where it is needed 93.2%

- Aid must meet the needs of the local people

90.7%

- The beneficiary state must raspect human rights

85.1%

- Transparency, effective public management and the fight against corruption are essential

- The beneficiary state must respect an overall development plan put forward by an international aid organisation

78.3% plan put forward

by an internati onal aid organisa tion

- Aid must be used to fund action by local NGOs

- The beneficiary state must have a democratic system of government

59.3%

56.0%

Convention expires at the turn of the century. Professor Pinheiro indicated that a first draft (green paper) on the possible shape of the ACP-KU relationship after 2000 will be published by the Commission by the end of the year. This, however, is likely to offer more questions than answers about future cooperation. 'I am not sure if we should keep the Lomé structure for every country, in the third millennium,' the Commissioner told the assembled journalists, highlighting the different levels of development now apparent between Lomé nations. Mauritius, now well on the way to becoming the 'Singapore' of Africa, was a case in point. He also pointed out the small island states of the Caribbean are at a very different stage of development from countries such as the Central African Republic or Burundi. He added that, in deciding what to do in future it would also be necessary to take stock of regional developments.

Questions about Lomé answered

In the meantime, efforts are under way to boost the image of Community aid. With this in mind, the Information Unit of the Development Directorate-General has just published a brochure entitled 20 Questions and Answers about the Lomé Convention.

Besides explaining in a nutshell what the Convention is, it answers some of the questions most frequently asked by sceptics about the benefits of development aid and trade preferences, highlighting the positive aspects for developing and developed economies alike. It points out, for example, that for every ECU 100 spent on aid, the Community recovers ECU 48 in the form of projects, supplies and technical assistance purchased from European companies!

The brochure provides a succinct explanation of how the Commission monitors aid to stop embezzlement and corruption. It highlights the right of the European Court of Auditors to check accounts of projects and fund transfers - and to investigate documents in the Lomé states, without the permission of the country concerned. Another precaution is that once a project is under way, financing is by banker's transfer. This involves a paper specifying that the holder of contract X, whose bank account number is Y. should be credited with Z amount of money.

An explanation is given as to why the European Commission is involved in development aid when the Member States have their own bilateral development policies.

The brochure explains the advantages of EC assistance over bilateral arrangements and details how the Lomé system has been evolving in line with the increasing globalisation of the economy, in particular since the fall of the Berlin Wall.

It also contains some pocket statistics on official development assistance (ODA) flows which help to underline the message that the European Union (Community plus Member States) digs deeper into its pocket than its industrialised competitors in providing development aid. In 1994, the Community and its then 12 member states (excluding Austria, Sweden and Finland), contributed an average of 0.40% of their gross national product in ODA. The individual percentages varied from 1.03% in the case of Denmark to 0.20% in Italy. This compared with figures of 0.29% and 0.15% for Japan and the United States respectively.

In 1994, total ODA from the Twelve reached $26.59 billion. Of this, $4.83 billion came from the European Community in its own right.

D.P.

The content of chocolate

Months of heated debate in the EU over the maximum allowable content of vegetable fats in chocolate have culminated in a Commission proposal for a revised Directive which, claim officials, should be to the taste of most interested parties.

The Commission has proposed that the 'subsidiatity' principle should apply to the content of chocolate. This means leaving it to individual Member States to decide whether they will allow the use of vegetable oil - up to a maximum of 5% by weight - in their chocolate-making. The eight EU countries where this practice is currently prohibited are free to modify their laws to take account of this 5% rule. The other cocoa butter and dry cocoa contents specified in the Directive - 18% and 35% respectively - may not be reduced.

The addition of up to 5% vegetable fats was authorised under Directive 73/241 for the UK, Ireland and Denmark when they first joined the EC. Other Member States who acceded later - Austria, Finland, Portugal and Sweden - also use these oils in chocolate production. The remaining EU countries have continued to prohibit the use of vegetable fats - and the sale of chocolate containing such fats. The result has been a partitioning of the EU market, in direct conflict with the Single Market principle.

If the proposal is approved by the Council and the Parliament, all 15 Member States will be free to decide whether vegetable oil can be used in making chocolate. Whatever their individual decisions, however, the barriers will come down, thus opening up the 'pure' chocolate markets to competition from less expensive varieties containing vegetable oil. Stricter labelling rules will also be introduced, with the precise nature of any substitute oils being clearly indicated. The simple mention 'vegetable oil' will no longer suffice. Martin Bangemann, the Commissioner responsible for industry, stressed the significance of revising the Directive in allowing chocolate products to circulate freely throughout the KU. This, he argued, would be in the interests of consumers.

Winners and losers

Traditional cocoa producers such as Cote d'lvoire, Ghana, Nigeria and Cameroon are fearful that the proposal may prompt some of Europe's 'pure' chocolate countries to change their laws - and that they will lose trade as a result. On the other hand, sheanut exporters in Burkina Faso, Mali, Ghana, Togo and Benin are hoping for higher sales if the 5% rule is adopted by more EU countries. Sheanuts account for 20% of Burkinabe exports and 98% of these are used to make vegetable oil substitute for chocolate products. The sheanut price is just 10% of the cocoa bean price. The Commission calculates that the maximum saving a manufacturer could expect by substituting vegetable fat for cocoa butter is around 1.5% of the ax-factory price.

In weighing up what to do, the Commission also considered the objectives of the International Cocoa Organisation (ICCO). These include taking 'all practical measures to increase the cocoa consumption in their countries by eliminating or reducing all obstacles to the growth of consumption in cocoa.' The ICCO estimates that if the 5% rule is applied in the remaining eight states - Belgium, Luxembourg, France, Germany, Greece, Italy, the Netherlands and Spain - it will lead to a reduction in cocoa butter usage of 36 000-50 000 tonnes, which amounts to a drop in demand for cocoa beans of between 88000 and 125000 tonnes. This represents between 9-12% of current consumption.

Some producers suggest that these estimates are too high since they assume that manufacturers will go for almost full substitution, which is not necessarily seen as inevitable. In addition, there is a belief that overall demand for chocolate products may grow as a result of the legal change.

This was not the view taken by NGOs who reacted promptly - and critically - to the Commission text. The Brussels NGO Liaison Committee issued a statement claiming that it would lead to a drop of between 6.25% and 12.5% in the main exporting countries' cocoa receipts - and an additional burden on the European Community's Stabex fund. But chocolate producers and others argue that this is speculative. The impact, they say, will depend on the legal response of the eight Member States, as well as on the reaction of manufacturers. There are signs that the latter may well stick to their traditional and distinctive methods. A spokesperson for the Belgian-based Cote d'Or/ Suchard, pointed out that the proposal had a long way to go before it was approved, and stressed that his company had no intention of changing their 'winning recipes which had served them well since 1883. At the same time, he admitted, vegetable oil could be useful in a more diversified range of chocolate products.

The vegetable oil 'lobby' argues that the addition of vegetable fat makes chocolate easier to mould and less likely to melt in warm climates. And for those who fear the elimination of 'pure' chocolate from the market, they point to manufacturers in Britain, where vegetable oil has traditionally been used, who still exclude such fats from some of their brands.

The proposal must now be debated by the Council and it is clear that the arguing is not over yet. But it is beginning to look as if the consumers may be the final arbiters. Through their purchasing habits, they are likely to be the ones who finally determine the winners and losers in the great chocolate debate.

D.P.

Minority businesses in the UK

In no country in Europe are ethnic minorities more organised than in the United Kingdom - though they are still not adequately organised, in the opinion of many, to pool their considerable resources together and overcome stereotypes, racism and unenployment. But this may change if the morale engendered by a recent exhibition of minority businesses in the UK is anything to go by.

The statistics speak for themselves. There are 3.3 million Asians, Africans and Afro-Caribbeans in Britain, about 5% of the population (and the figure is projected to double in the next 25 years). They have six elected Members of Parliament - five Labour and one Conservative - as well as numerous personalities in the world of sports and the media. According to the 1994 Labour Force Survey, 48% of ethnic minorities are graduates or are in full time studies and 55% earn salaries well over &15 000 (ECU 18 000) annually. They have a combined gross annual income estimated at f42 billion and an annual spending power of at least f26 ten.

Over the past 15 years, ethnic minority-owned businesses have grown considerably. In the last two years alone, they were responsible for more than 30 000 new business concerns throughout the country, according to the Commission for Racial Equality (CRE). Although many are in the retail trade, the 10% or so involved in production or manufacturing are extremely dynamic, particularly those connected with the clothing industry or operating franchises.

There are considerable differences between Asians on the one hand and Africans and Afro-Caribbeans on the other. The former are more business oriented and account for well over 80% of all ethnic enterprises. This success in business is often attributed to Asians' industriousness, but there is another crucial and often neglected factor: Asians have a stronger sense of group solidarity and patronage than Africans and Afro-Caribbeans. Whereas the former spend virtually all their earnings within their community, the latter (who are mainly Christians and are known to make greater efforts at integration into the British society) spend theirs in the society at large.

Unemployment among the black population in general is 19% compared to 8% for whites (in London it is three times higher). They are much more likely to be turned down by employers even when they have better qualifications than their white counterparts. Often self-employment is the only way out. This explains why there has been a boom in business start-ups by ethnic minorities over the past two years.

Although several black profffsional associations have come into being in recent years, it has been clear for some time to black leaders that the community's energies are dispersed and that these needed to be harnessed for the benefit of ethnic minorities as a whole. Blacks clearly have political and business clout to be exploited.

The idea for an exhibition of black businesses in the United Kingdom was mooted by a black business couple who, were influenced by a similar event held annually in the United States called 'Black Expo USA'. But the impetus came from the 'Race for Opportunity Campaign' launched in October last year by the Conservative Government through the Department of Trade and Industry. The campaign has so far seen more than 20 big British companies pledge to do business with ethnic minority enterprises. These include British Airways, British Gas, British Telecom, British Aerospace and several high-street banks and finance houses.

Held at the Barbican Centre in London on 4 and 5 May, the exhibition was aimed at creating awareness among ethnic minorities of their potentialities, showing the opportunities available to them not only in the UK but also in Europe, and at promoting networking amongst their businessmen and women.

Cross-party support

The exhibition, which had a cross-party support, could not have come at a more favourable time. Both the Tory government and opposition Labour Party have expressed support for policies favourable to small and medium-sized enterprises, which means that there should be continuity in this area if Labour comes to power in the next general election.

This was borne out by the enthusiasm with which the shadow minister for small business, Mrs Barbara Roche greeted the exhibition. To her, the event should be seen in the context of Labour's overall policy on small businesses. Speaking at one of the seminars which was run alongside the exhibition to discuss various aspects of minority business problems, Mrs Roche explained that there were three important reasons why her party was promoting small enterprises, especially those involved in exports.

The first was that large companies were downsizing, and job-creation towards the end of this century and into the next would be largely by small and medium-sized enterprises. The second was that small businesses were efficient distributors of wealth and the third was that they were good at innovation and using new technologies.

Because a large number of small businesses are folding, or are struggling to survive in the UK today (often as a result of late payment of bills by large companies), Mrs Roche said a Labour government would introduce a statutory limit of 30 days for the settlement of bills by large companies. The latter would then have to pay interest to small businesses for any late payments. Ethnic minority businesses, she also said, were part and parcel of Labour's strategy for economic growth and jobs in Britain.

The Barbican exhibition attracted more than 80 exhibitors mainly in retailing, finance, telecommunications, consultancy, arts and crafts, publishing, electronics and education. There were very few exhibitors from the manufacturing sector (a disappointment considering the number of Asians in the clothing industry) and virtually none in engineering. Some of the big companies connected with the 'Race for Opportunity Campaign' like British Airways and British Gas, as well as the newly created government-backed Business Link, the Customs and Excise department, the Inland Revenue, the Army and the Metropolitan Police were there. Also present was Louis Farrakan's 'Nations of Islam', (not necessarily on a recruitment drive, though that must have been part of the game), but as a reminder of its campaign for greater self-reliance by the black community which culminated late last year in the 'Million-Man' march on Washington DC. Video tapes of the march and speeches by Farrakan and other black leaders in the United States were on sale.

Difficulties

The seminar run concurrently with the exhibition attracted many notable speakers, among them Members of Parliament, Keith Vaz, Bernie Grant and Barbara Roche and Commissioner Dr Zaka Khan of the Commission for Racial Equality. Jessie Boseman, vice-president of 'Black Expo USA, who was also scheduled to speak, did not turn up.

There was general agreement on the main factors inhibiting the growth of ethnic minority businesses, the most obvious being racism and discimination. Ethnic businesspeople not only have difficulties obtaining public contracts, but they are often denied access to finance, market and even premises. Furthermore, they suffer from lack of management skills, networks and feedback. Dr Khan of the Commission for Racial Equality highlighted mounting racist attacks, mostly against Asianowned shops, which have claimed a number of lives in recent years.

Integration into mainstream economy

It is no longer a hidden fact that banks discriminate against black businesses. Surveys carried out by the NatWest and Midland banks have confirmed that fact. The latter though, it must be acknowledged, has a laudable Fellowship Programme, designed to encourage ethnic minority university students to take up careers in the Midland Bank on graduation. Lack of access to the market has effectively meant that black businesses have been left out of the mainstream of the British economy. Everyone agreed that it makes good economic sense to see them integrated into it. This was particularly the position of both Barbara Roche and Zaka Khan. The question was: would it be possible ?

Some of the issues raised on the floor by businesspeople revealed that many were sceptical that racism and discrimination could be overcome in multiracial Britain. The Commission for Racial Equality symbolises the fight against these two evils and Dr Khan had a hard time defending its role. The CRE was criticised for constantly quoting statistics on improvements in the living conditions of ethnic minorities which, it was argued, were totally removed from reality. Despite this, Dr Khan remained upbeat. To him the future promises great things for ethnic minorities. He promised to look into the grievances aired by some businespeopie during the seminar. Barbara Roche, for her part, promised that a Labour government would encourage the banks to offer packages of assistance to small enterprises, in particular, black-owned ones. They would also ensure that local councils offered minority enterprises a share of local government contracts.

Greater self-reliance and global trade

In view of the problems black businesspeople have had to contend with over the years, Bernie Grant, the Member of Parliament for Tottenham in North London, did not devote much time to the idea of integrating them into mainstream British economy. He felt that racism and discrimination were so prevalent that there was little chance of that happening. For him, the future for black businesspeople in Britain lay in greater self-reliance and entry into international trade.

In a speech entitled 'political responsibility, and black import and export business', the M.P. set the Barbican exhibition in the context of the global economic situation - one where he said, 'the countries of the North are exploiting those of the South, in particular African countries.' Africa's heavy debts to the West should in fact be the other way round. He argued that the new world trade agreement, which opens up the developing countries to competition, was unfair. 'This means that countries where minorities in the UK came from are going to have problems, and it is the duty of thee minorities to ensure that their countries have a fair deal,' he said. Mr Grant cited, by way of example, the EU's banana protocol under the Lomé Convention which gives preferential treatment to small Caribbean island producers and which is currently being 'unfairly' challenged by South American producers under the WTO rules. The role of multinationals, which are effectively acting es 'middleman', was, he believed, pernicious for developing countries. There was a need for black businessmen to step in.

Minority enterprises in the UK do not exist in isolation from the rest of the world, he elaborated. They should seek to engage in international trade and take advantage of their connection with their countries of origin. To facilitate this, Mr Grant said that a group under his chairmanship had set up a Global Trade Centre in his constituency in North London with the aim of helping black and minority enterprises establish direct trade links with Africa, the Caribbean and black America. The Centre was already in contact with a number of African countries which have expressed interest in the idea. Such a link would not only ensure a better deal for African producers but also favour the growth of minority businesses across the world. This was, he confessed, 'a political agenda' designed to reduce the excessive profits of multinationals, if not put an end to their 'outright exploitation' of Africa and the Caribbean. Mrs Roche expressed support for the Centre for the role it could play in boosting British exports.

UK minorities and the

European Union

A self-confessed Eurosceptic, who would have preferred the UK to strengthen economic ties with the Commonwealth rather than with Europe, Mr Grant displayed an extraordinary understanding of the European

Union's affairs. What worried him most about greater European integration, he said, was racism and the fact the UK job market, where black and ethnic minorities are already heavily disadvantaged, will be exposed to further competition from other Europeans most of whom speak several languages. However, he had no alternative but to support the Labour Party's line on Europe and work to secure the best advantage of British membership for ethnic minorities. He contrasted Tory 'divisions' on Europe with Labour's 'united' policy and condemned the British Government's attitude generally towards the Union.

The development of the Union, Mr Grant said, was of great significance to black people. He was sure the Government's Immigration and Asylum bill, which had come up against strong opposition in the House of Lords, was aimed at harmonising immigration laws with other countries in the Union. The bill, if passed, will change the UK's visa regime and have serious implications for ethnic minorities and their businesses in Britain. He revealed that, with the support of ethnic minority members of the British Parliament, Bill Morris, the black General Secretary of the Transport and General Workers Union (the second biggest trade union in the UK) and other European trade union leaders, the Intergovernmental Conference was being lobbied for the inclusion of a stronger clause against racism in the Treaty of Rome. The aim, ultimately, is to see measures in line with the UK's laws against racism and discrimination enacted at the Union level. This would include the establishment of a European equivalent of the Commission for Racial Equality - with similar powers - so as to establish a level-playing field for ethnic minorities in competition for jobs and in business throughout Europe.

Augustin Oyowe